There are now dozens of ethical unit trusts in the UK allowing you to benefit from good investment returns without compromising your principles. But how do you choose an ethical unit trust investment?
Ethical investments have been around since the 1980s although it is only in recent years that there has been a big increase in awareness of corporate social responsibility and environmental issues.
What is ethical about ethical unit trust funds?
Ethical investments have been around since the 1980s although it is only in recent years that there has been a big increase in awareness of corporate social responsibility and environmental issues.
Ethical investments have been around since the 1980s although it is only in recent years that there has been a big increase in awareness of corporate social responsibility and environmental issues.
Ethical investments have been around since the 1980s although it is only in recent years that there has been a big increase in awareness of corporate social responsibility and environmental issues.
There are lots of criteria for determining whether companies operate on an ethical basis. These include their environmental record, whether they support repressive regimes, whether they are involved in animal cruelty or whether they sell arms, alcohol or tobacco.
An ethical or ‘fair trade unit trust’ will typically have to undergo a rigorous screening process to establish whether it is ethical or not.
As well as establishing negative factors as above, funds will also look at positive factors where they choose companies which have wide community involvement, a positive environmental policy and good employee rights.
Some ethical unit trusts also invest directly in alternative investments. Fair trade unit trust investments typically invest in companies with fair trade policies while other eco unit trust funds invest in wind farms, sustainable forests and recycling plants.
Choosing an ethical unit trust investment
As there are many ethical unit trusts available in the UK, when you choose such a fund your criteria will often be the same as someone choosing a traditional unit trust.
So, when choosing fair trade unit trust investments, make sure you consider:
Charges and fees
Make sure you pick an ethical investment with competitive initial and annual fees and low eco unit trust prices. Generally speaking, lower fees and charges are better as it means that more of your money is invested
The performance of the ethical unit trust funds
Either compare unit trust on a percentage return basis or by ranking them against similar funds in the same sector. Of course, while previous performance is a guide it shouldn’t be assumed that such funds will perform as well in the future
The minimum investment level
Which unit trust investments are suitable will somewhat depend on how much you want to invest in the fair trade unit trust initially and on an ongoing basis
It’s important to take both the charges and investment return into considerations when you’re looking for the best ethical unit trust funds for your investment aspirations.
