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10 Best Ethical Funds For Investment | Expert Guide

Deciding on the best ethical fund, you can use for investment is not as easy as when you are eating pancakes. This is because there are several ethical fund options in the world presently.

Some run on environmental, social, and governance (ESG) principles with a mouth-watery impact. Considering this factor alone, there is every tendency that you will find yourself in a dilemma when left with making a choice.

Reading this article on the 10 Best Ethical Funds for Investment will save you the stress of searching for the right fund. Note we made this compilation based on expert guides and research.

Table of contents

What Is Ethical Investment?

Ethical investment refers to using one’s ethical values (moral, religious, social) as the primary filter for investing in securities. It relies upon the views of the investor.

Ethical investment is sometimes used with socially conscious investment interchangeably; however, socially conscious funds typically have an overarching set of guidelines used to select the portfolio, while ethical investment results in a more personalized outcome.

In a nutshell, it’s an investment strategy where the investor’s ethical values are the primary objective, along with good returns.

This objective could be treating employees respectfully, creating healthy products and services, and avoiding unethical business practices.

Apart from ethical fund investments, you can also learn how to Invest in the Stock Market.

Ethical Investment Fund

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There are many ethical funds for investments worldwide. The funds offer companies in different industries opportunities to grow in various areas. Some of them include:

  • Kames Ethical Fund
  • First State Asia Focus Fund
  • Kames Ethical Cautious Managed Fund
  • SLI UK Ethical Fund
  • The Renewables Infrastructure Group
  • Greencoat UK Wind
  • Syncona
  • Impax Environmental Markets
  • Stewart Investors Asia Pacific Leaders
  • Bluefield Solar Income Fund
  • JLEN Environmental Assets Group
  • Rathbone Ethical Bond
  • iShares Global Clean Energy UCITS ETF
  • Aegon Ethical Equity Fund
  • Royal London Sustainable Leaders
  • Baillie Gifford Positive Change

What is the best Ethical Investment Fund?

As you can see, many ethical investment funds are available globally. With the numerous options available, deciding on the one to consider can be daunting for you as an investor.

So, to relieve your stress, we have compiled a list of top ethical funds for investment based on some expert guides.

In our compilation, we looked at some factors investment fund experts considered, such as:

  • Fund’s ongoing entry charges
  • The level and type of companies it invests in.
  • Linked products available
  • The flexibility of investment amount.

We could list our 10 best ethical investment funds based on the above factors. They include:

  • Aegon Ethical Equity Fund
  • Impax Environmental Markets
  • AXA IM Sustainable Equity Fund
  • Royal London Sustainable Leaders
  • Syndrome Sustainable Global Equity Fund
  • Baillie Gifford Positive Change
  • Stewart Investors Worldwide Sustainability Fund
  • BetaShares Global Sustainability Leaders ETF
  • Janus Henderson Global Sustainable Equity Fund
  • Sustainable Future European Growth Fund

#1. AXA IM Sustainable Equity Fund

AXA IM Sustainable Equity Fund is one of the best Ethical Funds for Investment. This fund invests in a diversified portfolio of companies within developed and emerging markets.

To bring home its objectives, the fund screens the MSCI ACWI ex-Australia index and excludes companies involved in tobacco and armaments.

#2. Aegon Ethical Equity Fund

Aegon Ethical Equity Fund aims to maximize total return by investment in equities and equity-type securities in companies based in the UK.

The fund deals with business routine activities that influence the environment and society with a strict screening process to find suitable companies to invest in.

However, it uses negative screening in the sense that it doesn’t invest in companies that handle unethical activities like gambling, munitions manufacturing, and gambling firms.
Below are some features:

  • Invest From £25 per month or £100 single
  • It has an Ethical Equity Fund
  • Avoids some sectors which help it strike a balance between investing ethically and delivering strong performance is no easy task.
  • The ongoing charge is 0.78%

Note, this fund is available through the Hargreaves Lansdown Platform.

You can also learn:
How to Invest: A Beginner’s Guide to Investing in the Stock Market

#3. Impax Environmental Markets

Impax Environmental Markets Fund focuses on enabling investors to gain from the growth of more efficient delivery of services. This fund invests in companies that offer, use, or implements technology.

It’s based on products and services like alternative energy, water treatment, pollution control, waste technology, and resource management. One feature of this ethical investment fund is its ongoing charge of 1.02% per annum.

This and more make this fund among the Best Ethical Funds for Investment anyone can consider.

#4. Royal London Sustainable Leaders

With £ 1.7bn invested by Citywire AAA certified fund manager Mike Fox, this fund is fast becoming one of the most successful funds in the UK.

The fund applies both negative and positive screening. It looks at the healthcare and technology sectors. Note the fund invests in UK equities but can invest up to 20% in international equities.

Moreover, the strong record of the Sustainable Leaders Fund stretches over 10 years, as it has produced a total return of 182 percent, including dividends. In contrast, the index has increased by 85 percent, and an average of 97 percent has been created by competitors in the IA UK All Companies industry.

This fund has been top-rated in the last 6 months with investors with record inflows of £400m. Below are some of the features:

  • Invest From £25 per month or £100 single
  • It deals with the sustainable Leaders Fund
  • The income yield is 1.82%.
  • The fund has reasonable ongoing charges of 0.76% pa for an actively managed fund.
  • Income is Paid Bi-annually.

#5. Candriam Sustainable Global Equity Fund

The Candriam Sustainable Global Equity Fund is a managed fund that invests in listed global equities selected from the MSCI World Index.

More specifically, they invest in companies they deem sustainable, and the fund has some level of screening that excludes companies involved in tobacco, animal cruelty, nuclear power, labor rights violations, and more.

#6. Baillie Gifford Positive Change

This is one of the best ethical investment funds, launched in January 2017. The fund invests in the healthcare sector and can deliver positive change in four areas: Social inclusion and education, environment and resource needs, Healthcare and quality of life, and the base of the pyramid.

This investment fund has the following features:

Interestingly, the Fund invests at least 90% in shares of Companies anywhere in the world whose products or behavior positively impact society and/or the environment.

  • Ongoing charge of 0.53% per annum
  • Invest From £25 per month or £100 single
  • Income Yield 0.40%* Income Paid Annually

#7. Stewart Investors Worldwide Sustainability Fund

This fund invests in shares in companies around the globe. It was launched in 2012 to contribute to the sustainable development of the countries in which they operate. The features of this fund include:

  • An ongoing charge of 0.91% per annum.
  • Invest From £25 per month or £100 single
  • Has an Income Yield of 0.68%*
  • Income Paid Bi-annually
  • Its fund is for global sustainability.
  • Its focus is on capital growth.

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#8. BetaShares Global Sustainability Leaders ETF

This ethical fund aims to invest in over 100 big global companies renowned as leaders in climate sustainability. The companies must have high carbon efficiency. Note that companies that have fossil fuel exposure are excluded.

#9. Janus Henderson Global Sustainable Equity Fund

This is another top ethical investment fund that targets the capital growth of the world. This fund, with an ongoing charge of 1.69%, aims to offer capital growth for the long term. The fund invests at least 80% of its assets in shares/equities of companies in different industries.

Also, it invests in other assets, including Collective Investment Schemes (including those managed by Janus Henderson) and cash. Note that this fund has a Max Initial Charge of 4.50%.

#10. Sustainable Future European Growth Fund

Last but not least in our list of best ethical funds for investment is the Sustainable Future European Growth Fund. This fund aims at delivering capital growth for a long-term period, just like Janus Henderson Global Sustainable Equity Fund.

It implores an approach known as the ‘Thematic Approach’ in getting the major structural growth trends. With this, it focuses on stabilizing the global economy of the future and fund managers.

Coming to its investment companies, the fund invests in companies incorporated and the ones that carry out business in the European Economic Area.

Reference:

Editor’s Recommendations

Ajah Excel is a team growth and performance expert with over nine years of experience in blogging and personal development. He leads a team of 36 crazy, restless innovators with an enviable work culture at Silicon Africa Technologies Limited – a fast-rising tech firm from the SouthEast. Excel is the founder of Kiiky.com and WriterGig. He is also the co-organizer of TEDx Ikenegbu and convener of Social Media Fest. He is a vibrant learner who yearns to share his knowledge to educate and inspire young Africans. He has a B.Tech in Information Management Technology with certifications in growth hacking, effective communication, leadership, team, and personal development, to mention a few. Ajah Anayochukwu Excel is a passionate public speaker, creative writer, and brand storyteller.

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