Considerations when looking to build a portfolio of positive investments

There are lots of different reasons why people are increasingly looking to save and invest ethically or positively. Some stem from a dislike of certain sectors such as fossil fuels, tobacco or arms manufacturing, whilst other reasons can relate to the fact that many companies often prioritise short term profits over longer term benefits to society. In contrast, the motivation for others may be driven more by the aim of ‘making money do good’ rather than simply screening out negative investments.

In the past, arguments against investing ethically have often focused on the notion that you can’t create a positive social impact whilst also generating a financial return. This really isn’t the case, and can be demonstrated by the range of investment opportunities currently available on the Ethex platform including; Solar for Schools CBS’ bonds, Sandford Hydro and Ecological Land Co-operatives’ withdrawable shares. Of course, each of these projects are different and have different forecast returns and risks.

Whatever your reasons for looking to invest more positively, taking much greater ownership and control of your money to generate an impact is definitely a good idea - as ultimately you get to choose where and how your money is invested.

 

Building a portfolio of positive investments
As the home of positive investing, Ethex aims to bring together in one place a range of investments to enable you build a diverse portfolio. We’ve all heard the expression of not holding all your eggs in one basket and these words of wisdom are very appropriate when you’re looking to invest your hard-earned cash.

Diversification can come from a number of different factors. Here are five examples.

1) Diversify your investments across a range of sectors

Many positive investment providers look to enable their customers to invest in a broad range of sectors. At Ethex investors can choose to invest in a number of products sourced from a diverse range of sectors, including renewable energy, affordable housing, sustainable agriculture, sustainable transport and social care

2) Consider also the potential to diversify your investments within sectors too

In order to further spread your risk, within certain sectors such as renewables you can also diversify by different types of renewable technologies including; wind, solar, tidal and hydro power generation.

3) Think carefully about the time you want to tie up your money for. How accessible or ‘liquid’ do you need all or part of your investments to be

Considering how long you can afford to tie up your money for is an important factor for all investments and savings. Some of the products on Ethex are redeemable after a year meaning your money is readily accessible should you need it whereas others may require investment up to 20 years (and beyond should you choose to keep your money invested). While some will offer a mechanism to sell your shares or bonds via our secondary market, others may be looking for long-term investors.

4) Take into consideration the type and level of return you’d like to achieve

Investors’ objectives including the level of financial return versus social return will vary from person to person.

At Ethex we clearly display the projected financial return that could be generated from the offers as well as the social impact however, these returns are never guaranteed and depend on the continuing success of projects.

Certain products types such as bonds and shares can also typically pay a return to investors on an annual basis. Other types of product such as depository receipts forecast to pay a return and will allow you to reinvest this to further grow your money.

It’s also a good idea to do your research and take a close look at the track record of organisations you’re looking to invest in.

5) Think carefully about what type of products you’d like to invest in

There are a growing number of positive investment and savings products. These can be categorised broadly as follows: shares (equity investments), bonds, funds, savings, stocks and shares ISAs and cash ISAs. Diversification across a range of product types also can also help investors to spread risk.

 

Find out more about the latest positive savings and investment opportunities on the Ethex platform or get in touch with the team via help@ethex.org.uk or call 01865 403304.

Please remember your capital is at risk when you invest, so never risk more than you can afford to lose. The price and value of some investments on Ethex fluctuates and you may get back less than the amount you invested. Past performance is no guarantee of future performance. If you are in any doubt you should consult a financial adviser.

https://www.ethex.org.uk/savings--investments_16.html

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