There is a growing demand for investment options that are sustainable and ethical. This is because investors have become more aware of the impact their investments can have. They want to invest in products that align with their values, so they can sleep at night while also seeing their money grow over time.
When it comes to investing, there are lots of options available to you; however, most of them aren’t particularly sustainable or ethical. This is something that savvy investors are taking note of, and many are switching to sustainable ETFs as a result.
In this blog post we will be exploring why as an investor, you should switch to a sustainable ETF.
1. They Can Be Organized as Benefit Corporations
One of the ways that ETFs can be ethical is if they are organized as benefit corporations. These types of entities were first introduced in 2006, and they are designed to resolve the inherent conflict between bringing in returns for the shareholders and making a positive impact on society.
This business model is an excellent way to bring your values to the forefront, and it is great if you’re looking to invest ethically. That said, while not all ethical ETFs will be classified as benefit corporations, there is a good chance that most, if not all of the companies held within the fund are.
2. Greatly Benefits Society
This might seem like an overly vague term, but it really just means investing in businesses that positively impact society. Let’s face it, all businesses have an effect on society, but there are some that do more harm than good. By choosing to invest in businesses that positively impact society, you can help to improve the world around you.
3. It Combines Ethics and Investing
You might be wondering how it is possible to combine ethics and investments. Well, all you have to do is invest in a sustainable ETF to get these two things together. These types of funds will hold stocks in companies that are socially responsible, while also making money for their investors.
This is good news for investors, as they get to participate in the growth of their holdings while also knowing they are making a positive impact on the world. Moreover, ethical ETFs tend to be low cost, which means that they are likely to be more profitable over time.
4. Investors Make Good Profits
When you invest ethically, you can make a profit, and you can also do some good in the process. Sustainable ETFs are a prime example of this. Measure their progress over time, and you may be surprised by how many ethically-invested ETFs are outperforming the S&P 500.
It’s not just in one year that investors are likely to see their profits increase, but across multiple years. This can be attributed to the fact that a sustainable ETF tends to be often concentrated in fewer holdings, which means they are able to generate higher returns. .
Summing It Up
There is a growing demand for investment options that are sustainable and ethical. This is because investors have become more aware of the impact their investments can have. They want to invest in products that align with their values, so they can sleep peacefully at night while also seeing their money grow over time.