These Index Funds Make It Easy to Invest in Socially Responsible Companies
Statistics show that consumers want to support companies that support social and environmental concerns . If you want to invest in socially responsible companies too, Business Insider points out several index funds that can help you get started.
We have already explained how investing in index funds works . In simple terms, an index fund is a group of individual assets, such as companies, that you can invest in right away. Index funds are a great way for first-time investors . While you need a wide and varied portfolio, you can also invest in certain types of companies that support things like sustainability and fair trading.
If so, here are some specific funds you can look into, as Business Insider’s Gus Lubin explains:
Common Funds : “There is VFTSX , which tracks US companies that rank high on social, human rights and environmental criteria, with a spending rate of 0.22%. Its largest holdings include Apple, Microsoft and Alphabet. Outside the US,ESGD monitors the development of companies with high environmental, social and corporate performance at a cost ratio of 0.40%. ”
Renewable Energy : “… consider QCLN , which tracks NASDAQ green companies, with the largest holding company in Tesla. GEX is a similar option with a wider representation in the world (Tesla is the second largest holding). ICLN is an option with a large number of positions in emerging markets. ”
Gender Diversity : “… try SHE , which tracks major US companies that are leaders in gender diversity at a rate of 0.20%. Its largest holdings include Pfizer, PepsiCo, Amgen and 3M. “
Of course, the investing company that manages the fund ultimately chooses the companies, so you are at their discretion. It’s always worth doing your own research on a fund’s holdings (the companies it tracks), and you can do this with an exchange-traded tool like Google Finance. You will also want to look at the fund’s expense ratio , which basically represents the commission that comes with it.
To learn more about socially responsible investing, check out Business Insider’s complete guide below.
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