Ethical ISAs

There are in excess of 50 Socially Responsible Investment (SRI) funds in the UK. Many of these are unit trusts or investment trusts and can be accessed via an Individual Savings Account (ISA). These SRI funds have grown massively from only a few hundred million under management in the early 1990's to more than £6 billion today.

The minimum amount you can invest on a monthly basis is £50 per month.

A unit trust is simply a pool of individual investors’ money, which buys a spread of investments. The trust is then divided into units and the number of units you buy represents your share of the trust. By pooling many investors’ money, the fund aims to provide a greater spread of investments than you might be able to achieve on your own. Consequently this can help reduce the risk as well as providing you with the benefits of expert fund management. These trusts aim to provide capital growth or income or a combination of both.

What are the risk factors to be considered?

Both capital and income values may fall as well as rise, are not guaranteed and you may not get back the full amount of your original investment.

The performance of your investment will generally follow the performance of the market in which it invests. Where this market declines, the value of your investment will probably also fall.

The level of risk associated with any fund will be affected by the investment choices made by the fund manager. This level of risk may also change over time as the fund manager significantly changes the investments held by the fund. Any changes would be within the investment objectives of the fund.

Unless the performance of your investment meets or exceeds the rate of inflation, the real value of your investment will reduce.

If you exercise your right to cancel your investment, you may not get a full refund of the amount paid if the value of the investment falls before the notice of cancellation is received by the Investment House. This is because an amount equal to that fall in value will be deducted from any refund you would otherwise receive.

Where you switch from a fund where you are receiving income, any income received by the fund since the last payment will be reinvested in the new fund rather than paid out.

The current tax situation may not be maintained.