National Ethical Investment Week

 

 

Robin Keyte and his team at Towers of Taunton (Financial Services) Ltd, Chartered Financial Planners are delighted to be supporting the launch of the first ever National Ethical Investment Week.

 

To celebrate this occasion Robin will be launching a new online ethical funds screening service which will allow you to identify which investment funds represent a reasonable match to your personal views on social, ethical and environmental issues. It also allows you to see whether any of your existing investment funds take account of these issues.

 

To access the service, which will initially be available free during the launch period, go to:

 

www.towersoftaunton3.co.uk

 

There are now very nearly 100 ethical investment funds in the UK according to the Ethical Investment Research Service (EIRiS), many of which are available through pension plans as well as unit trusts. Interest in this area is growing and not just for ethical reasons; the best performing UK fund in 2006 was an ethical fund (CIS Sustainable Leaders). 

 

Generally these funds adopt a positive and negative screening approach. Negative screens mean the fund will not invest in companies that, for example, seriously pollute the environment, or are involved with pornography, tobacco, armaments or other areas of concern. Positive screens mean the fund actively seeks to invest in companies with a good record on, for instance, environmental reporting and management, workers' rights, sustainable forestry and other areas.

 

There is little or no impact on financial returns as 2006 proved, and the charges for ethical funds are the same as for other funds, so there is no tangible extra cost associated with investing this way.

 

Happily this is not limited just to shares. There are also ethical funds investing in corporate bonds (a form of fixed interest security that is lower risk than shares and good for income). This means by using a combination of ethical share and corporate bond funds, the needs of both cautious and speculative investors can be met, be it for income or growth.

 

Popular funds investing in shares include F&C Stewardship Income, Jupiter Ecology and for corporate bonds the Aegon Ethical Bond fund.

 

More sophisticated investors can buy an ethical screen of UK shares and instruct a stockbroker to work within it. The two providers of such screening at present are EIRiS and Ethical Screening.

 

For those who just want an ethical interest bearing deposit facility, Triodos Bank and Co-Operative Bank (& their internet arm Smile Bank) are good options, and the Ecology and Norwich & Peterborough Building Societies offer reasonable Cash ISAs.