The first ethical investment fund in the UK was launched in 1984 by Friends Provident as a direct result of their Quaker roots. 30 years later there are hundreds of funds available, operating an ‘Ethical’ or ‘Socially Responsible Investment’ mandate, from many of the World’s leading fund management groups. Though few of us are keen on the idea of investing directly in companies where harm is being done to others, do we really know where our money is being placed when we invest, for example, in a standard Balanced Managed Fund?

Examples of investment elements that will feature, within the portfolio of most Balanced Managed funds, of which you may not be particularly keen on investing in include:

  • Tobacco
  • Weaponry – sold to oppressive regimes
  • Gambling
  • Pornography
  • Organisations that are knowingly or unknowingly utilising child labour to achieve their objectives and or operate low levels of understanding, (out of ignorance, negligence or indifference) within their own supply chain to understand as to whether child labour or other human exploitation occurs within their supply chain.

So, you decide that you’re just not that keen on making an investment into funds that either fail to screen out companies engaged in industries that cause human harm, or are indeed actively involved in such activities, and thus you would like to invest in such a way as to filter out these types of companies. So…you’ll need to give up some of the potential investment return right? Wrong! In a paper released by Standard Life investments, they have proven that investing ethically has actually produced returns, over and above the equivalent non-ethical funds and against the appropriate Indices. Want an example? Take a look at the performance of Kames Cautious Ethical Managed Fund below.


Empirical evidence demonstrates that investing with an ‘Ethical’ mandate does not necessarily preclude or impact long term positive investment return, quite the opposite. Research shows us that companies which are mindful of their own impact on the world will create greater long term value for all stakeholders – investors, employees and consumer alike.

With Tobacco companies losing billion dollar law suits and seemingly solid companies seeing their share price collapse, overnight, off the back of a child labour scandal it makes financial investment sense to consider the ‘Ethical’ or ‘SRI’ investment as either constituent members of your wider investment portfolio or as the primary guiding principle in your own investment selection.

Contact us today to understand, in further depth, how we can help you and your family to achieve your financial objectives whilst maintaining an ethical investment mandate.


About AES Adviser

AES Adviser advises expatriate clients worldwide on all financial planning matters including wealth management, estate planning, offshore bank accounts, savings and investment, insurance, multi-generational wealth transfer and generating income, from wealth accumulated, to support retirement.