What are ethical ISAs?
Like other ISAs, an ISA is an efficient tax-free savings and investment vehicle in the UK. Ethical ISAs represent a choice people can make with their money. You can invest in the oil industry as well as the farming industry. However you will have formed your decision, ethical ISAs enable you to use your ISA allowance in investing in funds which are socially responsible.
Types of ethical ISAs
There are 2 types of ethical ISAs. You have the choice to invest in a Cash Ethical ISA or a stocks and shares Ethical ISA.
Who are ethical ISAs for?
There is an ever-increasing demand from investors to invest their money in the interests of the wider society. Ethical ISAs are designed to cater for these needs. Ethical ISAs are the best option if you’re concerned about investing in a way that champions your personal values and lifestyle.
What are the options do I have?
There are many choices you have if you have decided in investing in ethical ISAs. For those interested in investing in ethical ISAs, it is a good idea to look around for the best deals or consult with a financial advisor regarding your investment options
What is the difference between an ethical ISA and a normal ISA?
There is no difference between a cash ISA and an ethical cash ISA.
The only different lies in how your investment in cash or equity are used by your fund managers or by yourself if you have a self-select ISA account.
It is a misconception that your money tends to be more secured in an ethical ISA. There are no risk-free ISAs as per se, if you are making equity-based investment. Ethical ISAs work in the same way as normal stocks and shares ISAs. Ethical shares or stocks- based ISAs are no difference to any other investment products.
The value of your equities may go up and down in parallel with your fund performance or the stock market condition. You may see a great return on your investment, you may also risk losing some of your money.
Where will your money be invested?
An ethical ISA is committed to investing its money in ethical funds. The funds generated through ethical ISAs operate in the same way as normal stocks and shares ISAs.
With your investment in Ethical ISAs, the funds will be invested in issues that potentially can change the wellbeing of the others. For example, your fund manager may invest in waste management technologies and this will help reduce increase the level of domestic waste in the UK.