INVESTMENT FUNDS: Attracting HNWIs to Ethical Investing.

As published on international-adviser.com, Monday October 7, 2019.


An increasing number of UK investors have shown interest in putting their money in more ethical products, Rathbone Greenbank Investments has found.

More than four-fifths (81%) of high net worth individuals (HNWIs) would choose an ESG product, but three in four still hold stocks and shares in their portfolios that conflict with their values.

This was highest for those aged 35-44 (77%), as half of them revealed they had several investments they did not support ethically.

Among the respondents, 38% still invest in fossil fuel stocks, 35% in alcohol-related businesses, followed by 34% in mining companies and 33% in tobacco, despite a growing appetite for environmental products.

They said the reasons for still holding on to these types of stocks and shares was the lack of choice among ethical funds (45%), and to spread risk across different sectors (41%).

More than a third (38%) said the current uncertain economic environment was holding them back.

But one in four admitted they lacked knowledge and awareness of the benefits of ESG investments.

John David, head of Rathbone Greenbank Investments, said: “In a short space of time, ethical concerns from the environment to social injustice have gone from the fringe to part of the zeitgeist.

“It has become normal for people to make conscious decisions about their impact on the planet, with awareness growing every day. The fact that 81% of HNWIs care about their money being invested for good, aligned to their ethical beliefs, suggests we are on the right track.

“However, there is still work to be done.”

“The research suggests that even some of the shrewdest investors still believe the myths about ethical investing, thinking they have no alternative other than stocks and funds that go against their values,” David added.

“The truth is there is a huge choice of ethical stocks and funds offering good diversity to spread risk across a portfolio, even in an uncertain economic environment. And most importantly, this money makes a huge difference to companies’ attitudes, and the way companies conduct their business.

“There is a huge need for education. It is possible to have profit with principles.

“Our experience of over 20 years at Greenbank, as well as numerous studies, have demonstrated that applying ethical values does not mean sacrificing returns.”

ISLE OF MAN: Investec Bank Lau…