Millennial Investors Help Drive Huge Surge In Capital Flow to Ethical Funds
The growing demand of those investing online that their capital is invested in companies whose activities and
According to data provided by the Investment Association, the UK’s asset
What exactly constitutes an ‘ethical’ fund varies and investors should take the time to carefully read the investment guidelines of each individual fund being considered. Typically, they do not invest in companies that have a poor corporate governance record, are in ‘dirty’ industries or those considered as promoting activities that are proven to be harmful such as coal miners or tobacco companies. Issues important to some investors such as executive pay not exceeding a particular ratio when compared to the company’s lowest paid employees can also be part of the investment strategy of some ethical funds.
However, it is important for investors to dig into the details of
Companies involved in the extraction or wider business of fossil fuels
Others argue that companies with traditional interests in fossil fuels, such as big energy, are also the biggest investors in renewable energy R&D and infrastructure investment. A further point to the
Is it not hypocritical to drive a petrol car or use domestic energy suppliers whose power stations burn fossil fuels as well as buying energy from renewable sources because the full transition to
As well as actively managed ethical funds, where a fund manager picks the stocks to invest in, passive index tracking funds with stated environmental or social goals have also taken off in a big way, says the London Stock Exchange. A record number of new ethical ETFs have listed on the exchange this year.
Millennials investing online are, according to a recent YouGov poll, two times more likely to demand their capital is invested ethically than investors from older demographics. 13% of the under-34 age group said they wanted their pension funds to be invested responsibly compared to 6% of the 45-54 age group.
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