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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 MatchesNormal investment practiceNormal investment practiceThe investment history of a customer, which is used as a benchmark to test the bona fide public offerings requirement of the allocation of a hot issue. Statutory investmentStatutory investmentAn investment that a trustee is authorized to make under state law. Monthly investment planMonthly investment planA plan in which a certain amount is invested each month in order to benefit from dollar cost averaging. Enterprise Investment SchemeEnterprise Investment SchemeThe Enterprise Investment Scheme is a UK tax incentive scheme designed to encourage investors to invest in unquoted companies. The benefits are:Income tax relief at 20%: so if you invest £10,000, the taxman gives you £2,000 back.CGT relief: provided you hold your investment for five years, any gains subsequently made are free of capital gains tax.Tax relief on losses: if your EIS investment is a disaster, you can set the losses off against gains made in the tax year in which you incur losses.Rollover relief: if you use the proceeds from selling shares in Company A to invest in Company B, and Company B is an EIS-qualifying company, you won't have to pay tax on the gains made from Company A until you subsequently dispose of Company B's shares. i.e. your gain is rolled over.The maximum amount you can invest in an EIS is £150,000 annually. Similar tax breaks are available from investments in Venture Capital Trusts (VCTs). Essentially, these are investment trusts that invest in small unquoted companies. As with EIS investments, there are lots of rules which, if broken, will invalidate the tax advantages.The risks associated with EIS companies are high and you should take professional advice before committing funds to them. Alternative investmentAlternative investmentInvestment in items other than stocks, bonds or other securities. Wine, art, antiques are examples. Further SuggestionsInvestment opportunity setExpected return on investment Personal Investment Authority Reinvestment rate Mutually exclusive investment decisions Foreign Direct Investment Community Reinvestment Act (CRA) Investment software Investment Investment Company Act of 1940 Diversified investment company Multilateral Investment Guarantee Agency (MIGA) Investment management Temporary investment investment trust investment company Net investment Investment Valuation Model (IVM) Unamortized premiums on investments split capital investment trust Ethical Investment Research Service Legal investments Investment history Real Estate Investment Trust (REIT) Investment climate |
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