ETFs are a great way to invest in ethical companies. They can be used as a way to diversify your portfolio, or as an easy way to invest in companies that you may not have heard of before.
There is no doubt that the ethical ETF market is growing rapidly. In the US alone, there are now hundreds of such funds available, and this number is expected to grow in coming years as ethical investing becomes increasingly mainstream.
With so many options out there though it can be hard to know where to start. Fortunately, we have done all the research for you!
So, if you’re looking for ways to invest ethically but don’t know where to start, read on to know what to assess when looking for ethical ETFs and why they have great potential.
What Makes an ETF Ethical?
When looking for ethical ETFs, you should consider the following factors:
The most important aspect of an ethical ETF is whether or not it invests in companies that have high environmental, social and governance (ESG) standards. Some examples include companies that reduce their carbon footprint, use renewable energy and make sustainable products such as organic food or clothing. You can search this database to find out if your chosen ETF invests in these types of companies.
Renewable Energy Production
Look for an ETF that invests in renewable energy producers like wind farms and solar panels because this helps reduce greenhouse gas emissions from fossil fuel production. This will also help lower your electricity bill because these types of sources are more efficient than oil-based ones.
Why Should You Invest in Ethical ETFs?
It’s a Smart Investment
The market has become more and more conscious of ethical investing, and the growth in this area is only going to continue. By investing in companies that you believe in, you are making a difference for the better with each dollar that you spend.
You’re Investing in Social Change
When we invest our money, it is important to consider not just our own interests but also those of others around us. Ethical ETFs allow investors to do this because they help support companies that are making positive changes in the world around them.
Help Support Companies You Believe In
By investing in companies that reflect your values and beliefs, investors can support causes they care about while earning money over time on their investment decisions.
ETFs are a powerful way to invest. The right ones can give you exposure to sectors, industries and countries that would be too expensive or difficult to invest in directly.
An ethical ETF is an ETF that makes decisions based on the companies’ ethics and values, not just profitability. Ethical ETFs can help you make better investment choices as they tend to avoid stocks that aren’t good for society or the environment (such as tobacco or weapons manufacturers).
But before jumping in, make sure you’ve done enough research about the ETF. Try and find out more about the management, what companies they invest in, and if they align with your values.