New year, better portfolio. Why investing ethically makes more sense. A new year often means new beginnings. We clear out the house, make resolutions for our health and well-being and passionately vow to make positive changes. With all this motivation and inspiration, have you spared a thought for how you can make a positive difference…
New year, better portfolio. Why investing ethically makes more sense.
year often means new beginnings. We clear out the house, make resolutions for
our health and well-being and passionately vow to make positive changes. With
all this motivation and inspiration, have you spared a thought for how you can
make a positive difference with your money? Your superannuation and other
investments can be used as a force for good, if you know how. Here’s a quick
look at the ways that investing ethically is good for you, and the world around
You can make money while doing good for people
and planet. *
investing isn’t about being philanthropic, it’s about allocating your money for
profit that benefits society and the environment at the same time. Ethical
investing does not mean settling for lower returns. In fact, research shows that in general, there is no significant
difference in returns between investing responsibly and traditionally. In many
cases, sustainable investments perform better than traditional portfolios over
the long-term. One reason is that ethical investing commonly involves buying
shares in companies that have a longer-term view of their business. Their corporate
models focus on a sustainable future (rather than quick profits), value the
environment and communities that they operate in, and hence may have a reduced
risk of controversies. This is all good news for investors like you when
planning for your future.
You can diversify your portfolio and still
avoid the issues that concern you.
an increasing amount of ethical investment products available. While in the
past it may have been more challenging to allocate a portfolio across all asset
classes, nowadays there are diverse responsible investment solutions. Some
managed funds avoid controversial issues such as fossil fuels, tobacco,
gambling, animal cruelty or human rights abuses by removing these ‘sin stocks’
from their portfolios. This can mean that their funds have a lower exposure to
resources, mining or banking than traditional portfolios. This does not
mean an ethical portfolio would lack diversification. It does mean that
your portfolio has potential bias toward sustainable companies across a broad
range of industries. Ethical investment products cover the spectrum of asset
classes including equities, infrastructure and fixed income, as well as an
international, domestic or blended focus. If you care about certain issues and
don’t want to fund them with your superannuation or investments, then speak to
your financial adviser about the ethical options available to you.
You can create an investment portfolio that
supports the issues you care about.
ethical funds focus on companies that are leaders in sustainability or making
real positive change for people and the planet. Funds may specialise in future-driven
sectors and industries such as renewable energy, technology, education,
healthcare or regenerative agriculture. While some investment products only
incorporate sustainability themes, some provide mixed exposure and combine
positive inclusions with negative company exclusions. In this way, you can both
avoid issues that concern you and actively support the areas that mean
something to you.
never been as easy to achieve your goals while making a difference with your
money, as it is right now. Ethical investing has grown considerably in the past
few years. According to the latest report by the Responsible Investment Association of
Australasia, responsible investing grew 13% in 2018 and made up 44% of all
managed assets. This means that fund managers are listening to what you want,
changing their offerings and developing new responsible investment solutions.
are exciting times and you can make a real difference. What’s your investment
new year’s resolution?
Want to know more?
me about how responsible funds may work in conjunction with your overall
IMPORANT; This information is general in nature
only it does not take into account your individual circumstances. We recommend
that you seek professional advice before making any investment decision.