Do you believe that there’s more to business than the bottom line?

As an investor, maximising your profits is not your only goal. Long-term sustainability, ethics and purpose matter, too. If this sounds like you, then ethical investing is right up your alley.

What is ethical investing?
Ethical investing refers to the practice of using your ethical principles as the primary filter for choosing the types of products or funds you want to invest.

A similar concept is values-based investing, where a growing number of investors are choosing to align their investments with their personal values and beliefs. Other related terms to ethical investing include “socially responsible investing” (SRI), “environmental, social and governance (ESG) investing” and “impact investing”. There are slight differences among them but broadly speaking, these investment approaches consider a more holistic view of a business’s impact beyond their financial performances. Increasingly, when making their investment decisions investors and fund managers are including non-financial performance considerations such as how the businesses are impacting the environment they operate in, the community they interact with and how transparent they are in their corporate governance.

For example, some ethical investors may opt for financial instruments (including shares) that are free from usury, non-permissible activities and industries such as gambling, alcohol, tobacco and the production of firearms.  

Advantages of ethical investing
People who invest in ethical companies benefit emotionally and financially when they make good returns on their investments. They can feel good knowing that they are living in alignment with their values and are using their money to improve society. 

Another advantage of doing ethical investing is that as more people invest in ethical funds, the ethical investment market can grow more substantially in the future. 

Also, as ethical investing gains more attention and interest, businesses become motivated to improve their ethical practices to attract these investors and contribute more to the communities and environment around them. 

Disadvantages of ethical investing
As with all investments, there are some risks to bear in mind.

Ethical investing is not without financial risks. Additionally, ethical investors may have to spend more time keeping up to date with company developments and making changes to their portfolios should the companies they invested in depart from their ethical values and personal beliefs. 

Besides that, as ethical investing does not only look at a company or fund’s financial performance, the investor may be limited in their choice of investment products or funds.

Also, not investing in unethical companies does not mean that these companies will cease to exist. They may continue to do well and appeal to other investors.

Live your values with Etiqa’s Invest future 
Etiqa’s new Invest future Investment-linked Plan (ILP) promotes ethical investing and gives you access to a suite of Shariah-compliant funds that you can accumulate wealth with while staying true to your values. From just S$200 a month, you can diversify your portfolio by investing in these funds and enjoy the opportunities for potentially higher returns.

Invest future offers the same benefits of conventional ILPs without additional costs. It offers funds that eliminate speculative industries, prohibited industries and companies that deal with interest-bearing securities. It’s suitable for investors looking to pick responsible funds that are aligned with their values.

Learn more about Invest future today!

This policy is underwritten by Etiqa Insurance Pte. Ltd. Full details of the policy terms and conditions can be found in the policy contract.

Invest future is an Investment-linked Plan (ILP) which invests in ILP sub-fund(s). Investments in this plan are subject to investment risks including the possible loss of the principal amount invested. The performance of the ILP sub-fund(s) is not guaranteed and the value of the units in the ILP sub-fund(s) and the income accruing to the units, if any, may fall or rise. Past performance is not necessarily indicative of the future performance of the ILP sub-fund(s). A product summary and product highlights sheet(s) relating to the ILP sub-fund(s) are available and may be obtained from us via www.etiqa.com.sg/portfolio-funds-and-ilp-sub-funds. A potential investor should read the product summary and product highlights sheet(s) before deciding whether to subscribe for units in the ILP sub-fund(s).

As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid. You should seek advice from a financial adviser before deciding to purchase the policy. If you choose not to seek advice, you should consider if the policy is suitable for you. This content is for reference only and is not a contract of insurance.

This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact Etiqa or visit the Life Insurance Association (LIA) or SDIC web-sites (www.lia.org.sg or www.sdic.org.sg).

This advertisement has not been reviewed by the Monetary Authority of Singapore. Information is accurate as at 2 January 2025