ETHICAL INVESTMENTS
The Financial Services Authority do not regulate all forms of Term Assurance.

What are Ethical Investments?
When money, either in the form of regular premiums or a single lump sum, is invested in a pooled investment such as a Pension Fund or a Unit Trust, the managers invest that money on their client’s behalf into a portfolio consisting of, in most cases, at least some equities (company shares).

Prior to inclusion within a particular fund, the fund managers screen the potential investments, considering in great depth the relative merits/demerits (purely from an investment point of view at this stage) of each equity. It is from these equities, once screened, that the fund managers make their selections for normal investment funds.

So far, so good, but what if you are one of the growing number of people who would like to see their money handled wisely, not only from an investment viewpoint, but also taking ethical considerations into account. It is at this point that equities, which are to be considered for inclusion within an ethical Investment fund are screened a second time. It is during this ethical screening that so far as is reasonably possible, investments in companies which are known to be in some way ethically unacceptable (the negative criteria) are excluded and those which are felt to be particularly acceptable (the positive criteria) are brought forward. But what are the ethical criteria used by fund managers when they consider in which companies to invest? Broadly speaking, they are shown in the table below:

Ethical Criteria Product/Service	Positive Criteria A good record of suitability, quality and safety	Negative Criteria Weapons (military hardware, films of a violent or pornographic nature, tobacco, alcohol and gambling
Environmental /Conservation	Conservation of natural resources, pollution control, energy conservation and environmental improvements. Responsibility towards both the community in which the company operates and the public at large	Activities considered to degrade the environment: water pollution, destruction of woodland/ forests, manufacture of ozone depleting chemicals and pesticides Exploitation of people: oppressive regimes, general exploitation Exploitation of animals: the fur trade, intensive/factory farming
General	Openness about its activities. A good general approach to the management of its staff, customers and to the general public.	Financial institutions where loans/investments cannot be monitored. Repeated prosecutions i.e. Health and Safety Executive, National Rivers Authority or Advertising Standards Authority

Ethical funds, by their very nature, can never be totally secure. Also it must be appreciated that the price of units can still fluctuate, giving rise to the possibility that the total fund value of an ethical investment could fall.

If you are interested in ethical investments then please contact Morgan Cameron ILP Ltd. for further advice, when we will be happy to be of help.