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Ethical investment |
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Ethical investmentThe policy of selecting stocks for your portfolio partly on the grounds of the ethical or environmental code pursued by the companies in question.If you ask ten people what they think is ethical you will get ten different answers. Ethical views, by their very nature, are subjective.The major exclusions tend to be arms, alcohol, tobacco, gambling, animal testing, environmental damage and the payment of exploitative wages in developing countries. But the list could extend almost indefinitely and a complete screening by the Ethical Investment Research Service (EIRIS) would eliminate 60% of the FTSE 100 index.You can screen out negative factors or adopt a positive screening process and select companies with a clear environmental policy, for example.An ethical fund or portfolio of shares requires an appropriate performance benchmark. It will not reflect the market movements as a whole as it will hold a higher than average proportion of smaller companies which are much more volatile than blue chips.EIRIS maintains a database which you can use to filter an existing portfolio or to build one from scratch, using your own selection of a wide range of criteria. EIRIS: 020 7840 5700. e-mail: ethics@eiris.org website http://www.eiris.orgIn February 2000 FTSE International launched a set of stock indices called FTSE4Good. This is a tradeable and benchmark index which requires member companies to meet certain ethical standards for inclusion.Similar MatchesUnderinvestment problemUnderinvestment problemThe mirror image of the asset substitution problem, in that stockholders refuse to invest in low-risk assets to avoid shifting wealth from themselves to debtholders. Capital investmentCapital investmentSee: Capital expenditure. InvestmentInvestmentThe buying of shares in individual companies or units in collective funds (unit trusts, OEICs etc) in order to earn income and to make a capital profit.The placing of money with banks and other financial institutions in order to earn interest.In the UK, the Financial Services Act 1986 defines investments to include shares, debentures and other securities such as government securities, certain options and warrants, unit trusts and other forms of collective investment schemes, futures contracts and some long term life insurance contracts. Investment Company Act of 1940Investment Company Act of 1940Legislation that requires investment companies to register with the SEC and that outlines standards by which they must operate. Foreign investment argument for protectionForeign investment argument for protectionThe use of protection to attract FDI from abroad. It does work, since much FDI has been motivated by firms trying to get behind a tariff wall to sell their products. In an otherwise nondistorted economy, however, the cost in terms of more expensive goods is higher than the benefit from additional capital. Further Suggestionsprotected investment productsPassive investment management Legal investments Real Estate Mortgage Investment Conduit (REMIC) Reinvestment rate Normal investment practice Guaranteed investment contract (GIC) Zero investment portfolio Association of Investment Trust Companies Investment letter investment business Investment philosophy investment grade Systematic investment plan Investment Company Institute (ICI) Direct investment Investment Risk Securities and Investments Board Investment manager Portfolio investment Association of Unit Trusts and Investment Funds Investment certificate Investment Company with Variable Capital Monthly investment plan Net investment income per share |
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