If I had $1,000 then I’ve got an exchange-traded fund (ETF) in mind that I’d want to buy: BetaShares Global Sustainability Leaders ETF (ASX: ETHI).
What’s an exchange traded fund (ETF)?
If you don’t know what an ETF is then it could be a smart idea to look at Rask’s free beginner ETF investor course.
An ETF basically lets you invest in a whole bunch of different businesses with a single investment. Very handy if you want to get good diversification, but you don’t want to buy 50, or 100 or 1,000 businesses yourself. In-fact, I’d say buying 1,000 different companies yourself would be a very poor choice for all the brokerage costs alone.
What’s BetaShares Global Sustainability Leaders ETF (ETHI)?
The idea is that there’s a growing demand from investors to only be invested businesses that aren’t harming the world.
For some ethical investment options, that means just avoiding fossil fuels which contribute to heavy carbon use.
But there is a growing number of investments, such as ETHI, which also exclude businesses that are involved in a number of other activities that are deemed to be unethical.
ETHI excludes businesses involved in things like gambling, tobacco, weapons, alcohol, junk food and the destruction of valuable environments. It also excludes businesses where there are human rights and supply chain concerns.
Some investors are put off by these type of ‘ethical’ investments because they think ethical investing means expensive fees and lower returns.
ETHI has an annual management fee of 0.59%, which is quite a bit cheaper than many global active managers.
The returns have been really good in my opinion. There’s no lack of performance here. It has made returns of 20.6% per annum since the ETF started in January 2017.
It’s easy to see why ETHI has made these types of returns when you look at the quality of its biggest holdings: Apple, Tesla, Nvidia, PayPal, Mastercard, Visa, Home Depot, Adobe and ASML.
With its global portfolio, decent fees and strong returns, I think ETHI could be good enough to be a core part of a portfolio.
As well as ETHI, I suggest getting a free Rask account and accessing our full stock reports. Click this link to join for free and access our analyst reports.
