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Ethical Fund ISAs

Invest in line with your principles

Ethical fund ISAs allow you to invest in companies that operate in line with your principles and values.

Ethical ISAs

FTSE Future World Climate Change Equity Factors Index Fund ISA

from Legal & General

ISA Option
Allows ISA Transfers
Regular Savings
  • Fund Choice: The fund aims to provide a combination of growth and income by tracking the performance of the FTSE All-World ex CW Climate Balanced Factor Index.
  • Invest From: £20 per month or £100 single
  • Investment Options: This fund may be suitable for investors looking for a combination of growth and income by tracking the shares in companies that score high in value, quality, low volatility and size factors whilst incorporating climate change considerations as represented by the index.

Why we like it: The Future World Climate Change Equity Factors Index Fund invests in companies that seek to make positive change. The fund aims to provide a combination of growth and income by tracking the performance of the FTSE All-World ex CW Climate Balanced Factor Index. The fund is passively managed, to replicate the performance of the Index. As part of the Future World* range, the fund incorporates the L&G Climate Impact Pledge, a targeted engagement process, and may exclude companies if engagement proves unsuccessful.

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Ethical Equity

from Aegon

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: The fund looks at the effects a company's activities can have on the environment and society and uses a strict screening process to find suitable companies. The selected companies are the ones with the best long-term prospects, taking into the fund manage
  • Invest From: £25 per month or £100 single

Why we like it: Investing ethically often involves avoiding certain companies or sectors. These constraints mean striking a balance between investing ethically and delivering strong performance is no easy task. The fund manager Audrey Ryan is one of few fund managers who have handled the constraints of an ethical fund well over the long run.

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Future World ESG Developed Index Fund

from Legal & General

ISA Option
Allows ISA Transfers
Regular Savings
  • Fund Choice: Aims to provide exposure to global developed-market equities while integrating environmental, social and corporate governance factors
  • Invest From: £20 per month or £100 single

Why we like it: This Fund is designed for investors looking for growth and income from an investment in shares in companies that demonstrate good environmental, social and governance efforts in developed countries, as represented by the Benchmark Index. The Future World philosophy encapsulates how L&G identify longterm themes and opportunities, while managing the risks of a changing world. L&G use their scale and influence within the market to propel positive change on environmental, social and governance (ESG) issues, at the same time as seeking to achieve financial success. The fund is for clients who want to express a conviction on ESG themes, across a broad array of asset classes and strategies

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Future World Sustainable Opportunities Fund

from Legal & General

ISA Option
Allows ISA Transfers
Regular Savings
  • Fund Choice: Invests in a wide range of company shares, bonds, property and real assets (including property, land and infrastructure) which meet our long term sustainable investment criteria, based on environmental, social and governance factors.
  • Invest From: £20 per month or £100 single

Why we like it: Actively managed, with wide discretion to invest across different types of investment which the manager believes offer sustainable long term investment opportunities. As part of the Future World* range, the fund incorporates the L&G Climate Impact Pledge, a targeted engagement process, and may exclude companies if engagement proves unsuccessful.

The investment objective of the Fund is to seek to provide positive returns of both capital growth and income. The Fund selects investments which the Manager believes offer sustainable investment opportunities for the future based on environmental, social and governance related criteria.The Fund will seek to provide returns of 5% above the Bank of England Base Rate per annum over rolling five year periods. There is no guarantee that the objective will be met over any period and capital invested in the fund is at risk. This objective is before the deduction of any charges.

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

ii ACE 30 investments

from Interactive Investor

ISA Option
Allows ISA Transfers
Regular Savings
  • Protection Scheme: FSCS
  • Fund Choice: 30 Ethical Investments
  • Invest From: £25 pm or £100 single
  • Investment Options: A selection of 30 funds, investment trusts and ETFs that they believe offer high-quality ethical investment choices, across a broad variety of markets.

Why we like it: The UK's first rated list of ethical investments to help you align investments with your personal values. Building your investment portfolio can be tough – and it is even more difficult when you want to choose ethical investments. That can mean a lot of research. The ii ACE 30 makes the job easier for you.Interactive Investor have selected 30 funds, investment trusts and ETFs that they believe offer high-quality choices, across a broad variety of markets.

Important: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

What is an Ethical Fund ISA?

Ethical fund ISAs invest only in companies that are considered to meet a certain standard of social or environmental responsibility. What constitutes 'ethical' varies from investor to investor depending on their personal values - for example, some people may feel that investing in the alcohol industry is unethical, while others may not. Therefore, it's vital to discuss your priorities with your ethical fund ISA manager before investing.

Benefits of investing in ethical funds…

  • By using your ISA allowance to invest in ethical funds, you can be sure that your money only goes towards causes that tie in with your personal values and morals.
  • From a purely practical point of view, companies which have a good ethics track record are less likely to become embroiled in regulatory disputes, court cases and public boycotts - all of which can have a negative effect on share prices. Therefore, your investments may benefit from better long-term prospects - especially as consumers become more ethically aware.
  • An ethical fund ISA allows you to diversify your investment portfolio into new, sustainable markets.
  • By using your ISA allowance to invest in ethical funds, you can reap the returns tax-efficiently, with the extra reassurance that your money is being used in ways that tie in with your principles.

How do I go about investing in an ethical fund?

It can be tricky for individual investors to judge whether a particular company is operating ethically or not, so most ethical investments are made via a fund manager. An ethical fund manager will thoroughly research potential investment targets, ensuring that they meet certain criteria. Often, ethical fund managers will assess companies on both positive criteria (i.e. activities they engage in that are actively ethical) and negative criteria (i.e. activities they engage in that are actively unethical).

Positive criteria might include:

  • Does the company have specific environmental protection guidelines and practices?
  • Is the company taking steps to reduce its environmental impact?
  • Does the company ensure the health and safety of all its workers?
  • Does the company have a recycling policy?
  • Does the company have measures in place to prevent child labour in its factories?
  • Does the company pay its workers a fair wage?

Negative criteria might include:

  • Is the company involved in the production of weapons?
  • Does the company have any ties to animal testing facilities?
  • Does the company have any ties with countries that have oppressive regimes or those that have a poor human rights record?
  • Is the company involved in industries that might be considered harmful or damaging to those involved in them, such as gambling or pornography?
  • Does the company promote harmful products (e.g. tobacco), or promote products in a socially irresponsible way (e.g. infant formula in developing nations)?
  • Are the company's manufacturing processes or waste disposal methods harmful to the environment?

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.

Boost your financial future and make the world a better place

The future of investing isn’t just about making a profit. More and more people want their investments to have a positive impact on the world.

The good news is you can do both. There’s a growing trend that gives you the opportunity to grow your money, and build yourself a better financial future, while tackling global environmental, social and governance (ESG) issues. Download your factsheet to discover:

  • Why you should consider ESG issues when investing
  • How you can do it
  • Three funds to consider

Get FREE Factsheet from Hargreaves Lansdown »

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The tech industry has been booming for the past fifteen years; and it seems to be a rollercoaster that only goes up. The tech bubble has yet to burst, with companies coming out with more and more technological developments and consumer demand is certainly not slowing down. So, for the tech-savvy investor who wants to put their pennies behind this strong growing industry, we’ve put together our top three picks for Technology Stocks and Shares ISAs. 

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