Would you LIKE TO carbon offset your investments?

As with everything else in life, investment can have a social, environmental or ethical impact and as an investor you can and should consider the implications of your investment decisions in light of their impact.

When it comes to putting together an investment strategy to achieve your goals for life, it is important to have thought for the types of investments you feel comfortable investing in, not just from an understanding of the investment structure and market perspective but also from a moral, ethical and social perspective.

This is a little easier to manage if you are investing directly, as you can do your homework and most companies will have a ‘sustainability, environment and community’ policy statement, which they promote via their website.  Or if you are using managed investments you can select a specialist socially responsible investment funds manager that adds or removes companies based on
different social or environmental criteria.

What is the impact on your investments returns?  Not too much, you will be pleased to read!  Depending on your allocation and what you are happy to invest into, research from the Responsible Investment Association of Australasia (www.riaa.org.au) shows that these types of funds are comparable and even provide outperformance in some shorter term periods when compared to their ‘mainstream’ peers.  The table below illustrates this comparison and is from ‘The 9th annual Benchmark Report for Responsible Investment 2009’

* Returns to June 2009 (net of Management Fees) % p.a
* Number of funds in each responsible investment category is shown in brackets
* Best performance for period is shown in bold

When it comes to your investments, the above shows that being green can add a dynamic to your portfolio that provides long-term sustainability without removing the quality performance returns that most investors are chasing!

No matter what your goals for life, as with all investment strategy and product, do not put all your eggs into one basket, seek advice and empower yourself to create wealth through understanding.

Scott Malcolm is Director of Money Mechanics (ph: 02 6257 5557) who are authorised to provide financial advice through PATRON Financial Advice AFSL 307379.

The information provided on this document is of a general nature only. It has been prepared without taking into account your objectives, financial situation or needs.  Before acting on this information you should consider its appropriateness having regard to your own objectives, financial situation and needs.