A GUIDE TO ETHICAL AND SOCIALLY RESPONSIBLE INVESTMENT FUNDS

HOW DO INVESTMENT FUNDS MEET THE INVESTMENT CRITERIA?

Many ethical *investment funds* will have a panel or committee responsible for setting the criteria and establishing an approved list of companies from which the portfolio manager can select investments. Ethical Investment Research Services (EIRIS), the UK’s leading independent provider of research into the ethical status of companies, also helps ethical funds with the ongoing monitoring of investments.

Helpful Hint

Each fund should state clearly its exclusions and inclusions, so you can shop around to find the one that does what you want it to. Remember some funds will be ‘greener’ than others.

The type of screening used by the fund manager will be very important to you if you are particularly concerned about certain issues. You may wish to support certain companies that you feel are making a positive effort to be ‘green’ while avoiding those involved in activities that you do not agree with. Positive and negative screening will help you make your investment choice.

HOW DO I CHOOSE AN ETHICAL INVESTMENT?

The first step when choosing an investment is to pick one which is appropriate for your objectives and attitude to *risk*. IMA produces the guide ‘Introducing Investment’ which may help you with such decisions. See “How Can I Find Out More?” for details of how to obtain a copy.

If at any time you are unsure if an investment is suitable for you, you should contact an authorised *financial adviser* for assistance.

Once you have chosen a suitable type of investment you can then select a fund. Ethical investment is about personal choice. Do you want to avoid investing in companies involved in activities you dislike? Or do you want to support firms that have a positive impact on society? Remember some funds will combine both approaches.

Each fund should state clearly its exclusions and inclusions, so you can shop around to find one that does what you want it to. Remember some funds will be ‘greener’ than others.

As a fund aims to please a lot of people, you may not find one that precisely mirrors your objectives but there should be several that are close.

You can also contact an authorised financial adviser who will be able to help you choose an ethical fund to suit your individual needs.

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