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Ethical ETFs
Investing strategy
I want to invest ethically, what’s the best ETF for me?
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Sharmistha
Asked on 10 March 2025
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Investing ethically means choosing investments that align with your personal values, such as environmental sustainability, social responsibility, and good governance. ETFs (Exchange Traded Funds) that focus on ethical or sustainable investing criteria can be a great choice for investors looking to make a positive impact with their money.
Two popular ethical ETFs are ETHI and VESG. Both ETFs aim to provide investors with exposure to companies that meet specific ethical criteria.
ETHI (BetaShares Global Sustainability Leaders ETF): This ETF focuses on global companies that are leaders in environmental sustainability and are not engaged in activities deemed inconsistent with responsible investment considerations. It excludes companies involved in activities like fossil fuel production, gambling, tobacco, and armaments.
VESG (Vanguard Ethically Conscious International Shares Index ETF): VESG offers exposure to large international companies excluding those involved in non-renewable energy, alcohol, tobacco, gambling, military weapons, and civilian firearms. This ETF is designed for investors seeking to invest in companies with high environmental, social, and governance (ESG) performance.
When choosing the right ETF for ethical investing, consider the following:
- Underlying Assets: Look at what companies or sectors the ETF invests in. Ensure these align with your ethical values.
- Performance History: While past performance is not an indicator of future results, it can give you an idea of how the ETF has managed through different market conditions.
- Expense Ratio: This is the annual fee expressed as a percentage of the ETF’s average net assets. Lower expense ratios can significantly affect long-term returns.
- Liquidity: Check how easily you can buy and sell shares of the ETF without affecting its price
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