Ethical Investment
Ethical Investment Plans…
Ethical investment Funds have become increasingly popular due to increased public awareness of issues such as climate change and human rights. See below for a selection of Ethical Investment Funds:
| Ecology Fund | £50 per month | |
| A socially responsible fund that primarily acts as a growth fund, but also aims to provide a growing income return. Save up to 90% on Initial Charges. |
| Amity International Fund | £50 per month | |
| Aims to invest in socially responsible companies and seeks to achieve capital growth combined with a reasonable level of income. Save up to 95% on Initial Charges. |
| Global Climate Change Fund | £50 per month | |
| Invests globally in socially responsible companies to produce capital growth. Save 100% on Initial Charges. |
Disclaimer (Please Read)
General risk warnings
- The list of funds/investments provided above should not be seen in any way as being a recommendation. No advice has been given and you should be aware that any investment which takes place will be transacted on a “non-advised sale” basis.
- Full details of the investments will be provided in the documentation/brochure sent to you and it is up to you to ensure that you fully understand the nature of the investment before proceeding. If you are at all unsure of the suitability of the type of investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.
Collective investments
- Collective investments such as unit trusts are designed as medium to long term investments, for example at least five years.
- The value of your investment and the level of any income received from it can fall as well as rise and is not guaranteed and you may not get back the amount of your original investment.
- Any income yield quoted is correct at the time of going to press. Income yields vary and are only estimates. The actual dividend income that you receive will depend upon the income payable by the underlying assets of the fund and could change, either up or down, at any time. Dividend income from an ISA will, under current legislation, be free of UK income tax. Dividend income paid from a fund not held within an ISA will be subject to income tax, which may or may not be reclaimable depending upon your circumstances and the type of investment. In some cases, there may be additional income tax to pay.
- If you choose a fund which invests overseas, there is the addition of “exchange rate” risk which could reduce any gains or increase losses if the currency moves against you.
- Dividend income paid from a fund not held within an ISA will be subject to income tax, which may or may not be reclaimable depending upon your circumstances and the type of investment. In some cases, there may be additional income tax to pay.
Structured Products
- Structured Products are fixed term investments and are designed so that your capital remains invested for the full term of the plan. Although it may be possible to encash your investment before the end of the term, this could mean that an early encashment charge is applied and you may not get back the full amount of your capital.
- An investment termed as a “capital guaranteed structured product” is one where the return of your capital at maturity is not dependent upon the performance of an index or another financial instrument
- An investment termed as a “capital at risk structured product” is one where the return of your capital at maturity is dependent upon the performance of an index or another financial instrument.
Specific ISA warnings
- The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
- Dividend income from a stocks and shares ISA will, under current legislation, be free of further liability to UK income tax whether this is paid out or automatically reinvested.
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| Amity Sterling Bond | 5.87%* | |
| Looks to achieve an attractive income by investing in Government back fixed interest securities. Save up to 93% on Initial Charges. |
| Environmental Income Fund | 3.80%** | |
| Focuses on investing in socially responsible companies to an income and long-term capital growth prospects. Save up to 90% on Initial Charges. |
*The distribution yield reflects the amounts that may be expected to be distributed over the next twelve months as a percentage of the mid-market price of the fund as at the date shown. It is based on a snapshot of the portfolio on that day. The distribution yield is also the underlying yield for this fund. Information correct as at 30th October 2009.
**Historic Yield reflects distributions declared over the last 12 months as a percentage of the mid-market price of the fund as at 30th September 2009.
***Target yield
Disclaimer (Please Read)
General risk warnings
- The list of funds/investments provided above should not be seen in any way as being a recommendation. No advice has been given and you should be aware that any investment which takes place will be transacted on a “non-advised sale” basis.
- Full details of the investments will be provided in the documentation/brochure sent to you and it is up to you to ensure that you fully understand the nature of the investment before proceeding. If you are at all unsure of the suitability of the type of investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.
Collective investments
- Collective investments such as unit trusts are designed as medium to long term investments, for example at least five years.
- The value of your investment and the level of any income received from it can fall as well as rise and is not guaranteed and you may not get back the amount of your original investment.
- Any income yield quoted is correct at the time of going to press. Income yields vary and are only estimates. The actual dividend income that you receive will depend upon the income payable by the underlying assets of the fund and could change, either up or down, at any time. Dividend income from an ISA will, under current legislation, be free of UK income tax. Dividend income paid from a fund not held within an ISA will be subject to income tax, which may or may not be reclaimable depending upon your circumstances and the type of investment. In some cases, there may be additional income tax to pay.
- If you choose a fund which invests overseas, there is the addition of “exchange rate” risk which could reduce any gains or increase losses if the currency moves against you.
- Dividend income paid from a fund not held within an ISA will be subject to income tax, which may or may not be reclaimable depending upon your circumstances and the type of investment. In some cases, there may be additional income tax to pay.
Structured Products
- Structured Products are fixed term investments and are designed so that your capital remains invested for the full term of the plan. Although it may be possible to encash your investment before the end of the term, this could mean that an early encashment charge is applied and you may not get back the full amount of your capital.
- An investment termed as a “capital guaranteed structured product” is one where the return of your capital at maturity is not dependent upon the performance of an index or another financial instrument
- An investment termed as a “capital at risk structured product” is one where the return of your capital at maturity is dependent upon the performance of an index or another financial instrument.
Specific ISA warnings
- The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.
- Dividend income from a stocks and shares ISA will, under current legislation, be free of further liability to UK income tax whether this is paid out or automatically reinvested.
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Investors will generally look at ethical investments for one of two reasons:-
- They wish to take a socially responsible approach to their investment portfolio, aiming to avoid companies that have a negative impact on the environment or on social issues, or;
- They see significant growth opportunities in companies who are likely to benefit from improvements and developments in these areas.
For larger Portfolios, investors have the option to invest directly into companies that they feel meet certain “green” criteria, either through a self managed portfolio of via a stock broker.
However, for many private individuals, it may be more appropriate to look at “collective” type funds, ie, unit trusts, investment trusts, open ended investment companies (OEICs) and pension funds, etc.
More and more investment managers are becoming aware of investors’ wishes to tap into this relatively niche market which has meant that there is significant choice when looking at the most appropriate ethical investment fund for you.
Ethical investment funds can take one of two approaches. Either:-
- Light Green – avoiding stocks that have a negative impact on the environment and its people. For example, avoiding companies in the oil sector or those involve in arms, alcohol or animal testing.
- Dark Green – targeting those companies actively making a positive contribution to the environment and its people. For example, those companies developing renewable energy sources.
A dark green fund is, by its very nature, more likely to invest in small and medium sized companies in markets which are developing such as clean energy and green transport whereas the light green funds will have a significant holding in larger companies, for example, telecommunication companies and banks.
It is possible now to find ethical funds which can invest in equities or fixed interest securities (bonds) and which are growth or income orientated.
In theory, being a socially responsible investor should not impact significantly on your investment planning. As with all investments of this type, however, it is important that professional impartial advice is sought and when choosing a fund you take into account your overall objectives and investment risk profile.
