Ethical investments are a form of investment product that aim to make the investor money but not at the expense of various groups by exploiting them. It is the policy of choosing types of investment partly on the grounds of the ethical or environmental codes pursued by the companies the investor wishes to invest in.
So, for instance, some companies that invest in areas such as arms or tobacco may be boycotted as part of an ethical investment portfolio. There is a set of stock indices called FTSE4Good which is a tradeable index that requires member companies to meet certain ethical standards for inclusion.
As public awareness continues to grow ethical investments are increasing becoming a consideration and gaining in popularity. With only a comparatively small number of ethical companies and investment opportunities there are limited number of stocks that investors can invest in meaning that returns are often lower than investments in companies elsewhere.
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