Being a green investor gives me more than just a warm glow?

What is Green Investing?

Known as ethical investing, sustainable investing or socially responsible investing, green investing is an investment strategy that considers both financial return and social good.

What are Ethical Investment Funds?

The easiest way to understand ethical funds is to view green investment products as a spectrum from "deep green" to "light green", representing investors' level of conviction.

• Funds in the deep-green end are associated with sectors considered harmful such as tobacco or controversial weapons and medication

• The middle band of deep-light green are funds that progress upper on the ethical ladder, away from harmful but are still far from ethical funds.

• Ethical funds usually have higher fees due to extra work with blocking out interferences of negative companies and including positive companies. Measured by the Responsible Investment Association Australasia (AIAA), these funds, although playing a minor role in the fund management industry, are growing and gain recognition rapidly.

Performance of Ethical Funds

Graph source: Stockspot

In recent years, more and more investors have began investing with ethical and social responsibility. Governed by AIAA, they estimate that there is over $6 trillion invested in ethical strategies globally.

Do Ethical Funds have high returns?

Unfortunately, returns from ethical funds have been up and down in past years. However, their performance has seen a rise in competitiveness in the recent 5 years, even beating a few market indexes! That being said, be careful when investing in ethical funds, even though green investing is the trend, make sure the fund invests in areas where your values lie.