4 August 2020

  • News

Investing ethically

Investing ethically isn’t a new concept, but in recent years it has become a requirement for many when looking to invest their money.

We seek 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.

You may be surprised to learn that the first ethical fund was launched as late as 1984.

What is ethical investing?


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.

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 customers (who we call members) access to a wide range of different assets without directly exposing their funds to the stock market but still offers greater potential growth than bank or building society accounts.

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.

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