The markets have been extremely volatile lately owing to a multitude of factors including rate hikes fears and risks of a potential trade war. One particular segment of the market, which has been attracting investor attention over the last few years, is the socially responsible investing segment. These ETFs allow you to invest in line with your principles and contribute to making the world a better place in your own small way.
Investing in separate stocks that you feel are commensurate with your principles can be difficult, while also maintaining a diversified portfolio. Here, ETFs come to the rescue, as they offer a diversified portfolio of stocks focusing on particular screens for environmental, social or governance (ESG) related issues.
Gender equality has been the top trend in 2017 and 2018 so far. With increased focus on disparities in the pay of men and women, investing in companies that have a better standing with regards to gender equity has been gaining popularity. For instance, HSBC revealed a 59% gender pay gap, even though HSBC’s UK workforce comprises 54% women. Moreover, a mere 23% occupy senior roles at the bank.
Another area attracting investor attention is clean energy. After President Donald Trump decided to leave the Paris Climate Accord last year, multiple critics have argued the need to shift toward cleaner energy and reduce fossil fuel consumption. There are multiple ways to gain exposure to this principle, either by investing directly in funds having a portfolio of stocks involved in clean energy, or by investing in funds having a portfolio of stocks trying to save energy and reduce carbon emissions in their day-to- day operations.
The latest trend among sustainable investing enthusiasts is the need to steer clear of weapons companies. After the school shooting at Stoneman Douglas High School in February and the incident in Las Vegas music festival in 2017, arguments for gun laws and imposing stricter rules regarding gun sales have panned up. Therefore, funds that refrain from investing in companies involved in weapons have caught investor attention.
