Ethical Investing

Just for a moment cast your mind back a whole decade to 2010. You’ve had a busy morning and taken a minute to reflect on your investments over a coffee. Whilst walking to your desk , you overhear a lively conversation on ethical and social investing. In this animated debate, you hear a few snippets of someone being dismissive, how it’s “niche, expensive, low returns” and the subject quickly changes to something else.

And, back in 2010, you probably would have agreed, sipped your coffee and thought no more about exploring this venture for yourself. For years, ethical and social investing was considered expensive, difficult, and synonymous with poor performance. Even up as late as 2015 ethical and social investing was considered a niche market with low inflows globally. 

However, in 2020 there is a much greater awareness of climate change and social activism. The investing world has taken these conversational trends into active engagement. So the question is, how has ethical and social investing changed in the last ten years?

The rise of the “ESG” investor (Environmental, Social and Governance)

In 2020 alone global inflows to ESG funds have increased by $71.1 billion, between just April and June the increase of new monies into ESG funds has allowed fund managers to be able to meet with business owners to ensure that business are implementing ESG values into day to day activities. What’s more, fund managers are now more interested than ever in how businesses intend to sustain ESG values into the long term running of a  business. This has given investors confidence that the money they are investing is being used in the ways they expect it.

This year the Financial Times reported that data collected by Morningstar suggested:

“ the majority of (ESG) strategies have done better than non-ESG funds over one, three, five and 10 years.” 

With hundreds of potential ESG funds to choose from, ranging in structure, risk and price; it might feel overwhelming knowing where to start. Ammonite Wealth can advise on funds which invest with ESG principles. 

If you feel ESG investing is something for you, please do not hesitate to get in touch with us. robert@ammonitewealth.com

Risk Warnings

Past performance is not a guide to future performance, nor a reliable indicator of future results or performance. Investors should remember that the value of an investment and the income received from an investment can go down as well as up, and they may not get back the amount they invested.

Sources*

https://www.ft.com/content/733ee6ff-446e-4f8b-86b2-19ef42da3824

https://www.ft.com/content/27025f35-283f-4956-b6a0-0adbfd4c7a0e

https://www.ftadviser.com/investments/2019/10/10/ethical-investing-is-having-its-moment/