Ethical Investments…

Posted on February 2, 2017

Sheffield Mutual seeks to adopt an ethical approach to investing and it is our policy not to invest knowingly or directly in industries relating to armaments, tobacco, gambling and pornography.

What is ethical investing?

Definition – Using one’s ethical principles as the main filter for investment selection. Ethical investing depends on an investor’s views; some may choose to eliminate certain industries entirely (such as gambling, alcohol or firearms) or to over-allocate to industries that meet the individual’s ethical guidelines.

A good way to start thinking about ethical investing is to list the areas you want to avoid and where you’d like to see your money invested. From there you can come up with an asset allocation plan and begin researching individual securities and funds. Some funds and policies can be quite complex. Sheffield Mutual’s fund is one of the easier to understand and it requires no input from you as the investor, it simply states that the fund does not invest knowingly or directly in armaments, tobacco, gambling or pornography… other funds give you the options as to where you’d like your money invested and require much more input from you as the investor.

The first ethical fund was launched in 1984. There are of course many different ethical funds available so you may need to contact a suitably qualified financial adviser (which may incur a fee) to assist you in finding the right fund.

Asset Allocation

Asset Allocation

Sheffield Mutual’s ethical fund is also a with-profits fund. It is a way of pooling the money of hundreds of investors into a single fund with ethical values. This is then invested in a mix of assets, such as stocks & shares (equities), property, commercial mortgages, gilts, bonds, fixed interest and cash. This gives members access to a wide range of different assets without directly exposing their funds to the stock market, but offers greater potential growth over say a straightforward cash investment. Sheffield Mutual’s balanced with-profits fund is managed with a view to providing a low to medium risk investment.

If you were to invest directly into the stock market your funds could fluctuate as the stock market rises and falls, which can be quite “risky” as there is a chance that you could lose your capital, but this option also has the potential for greater growth. By investing in a with-profits fund the risk is spread out over the different types of investments which reduces the risk. Sheffield Mutual also implements a smoothing process, whereby money is put aside in the “good” years to compensate for the years when the market is volatile, therefore being able to smooth out the returns.

So now it’s down to you! Where is your money currently invested? Are you happy with your returns? Have you considered investing ethically? Maybe you have not considered where your funds are invested?

Some food for thought…

THIS BLOG PROVIDES GENERIC INFORMATION AND OPINIONS OF THE WRITER AND SHOULD NOT BE RELIED UPON FOR MAKING INVESTMENT DECISIONS. NO ADVICE HAS BEEN PROVIDED BY SHEFFIELD MUTUAL. IF YOU ARE IN ANY DOUBT AS TO WHETHER A SAVINGS OR INVESTMENT PLAN IS SUITABLE FOR YOU, YOU SHOULD CONSIDER CONTACTING A FINANCIAL ADVISER FOR ADVICE. IF YOU DO NOT HAVE A FINANCIAL ADVISER, YOU CAN GET DETAILS OF LOCAL FINANCIAL ADVISERS BY VISITING WWW.UNBIASED.CO.UK. or WWW.VOUCHEDFOR.CO.UK ADVISERS MAY CHARGE FOR PROVIDING SUCH ADVICE AND SHOULD CONFIRM ANY COSTS BEFOREHAND. ANY REFERENCE TO TAXATION IS BASED ON THE WRITER’S UNDERSTANDING OF CURRENT TAX LEGISLATION AND PRACTICE, WHICH COULD CHANGE IN THE FUTURE.

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