ETHI as my very first investment?

Question

Hi everyone!

This might be a silly question. I’ve just embarked on my investing journey and there’s so much to learn. Ethical and sustainable investments are really important to me. I’m curious about what people think of ETHI and whether it would be a good choice for my first investment. My goal is to build wealth over the long term and have it grow independently.

Based on what I’ve read, ETFs seem to be the best way to achieve this goal. Does ETHI, when combined with other investments, have the potential to help me reach it?

Thank you very much for any advice :)

Answer

Hi Sienna.

If ethical investments are important to you, then ETHI is certainly one way to do that.  If it screens out companies in a way that you’re happy with, then that’s usually the best way to choose an ethical fund (as they each have different filters on what they include or exclude in their funds).

It definitely has the potential to help you reach your goals, especially if combined with other investments like you’ve said.  As you probably know, ETFs which contain lots of companies are more likely to have good long term performance since they’re less reliant on any individual company.

Hope that helps.

Answer

Hello!

It’s great to hear that you’re starting your investment journey with a focus on ethical and sustainable investments. ETHI, or the BetaShares Global Sustainability Leaders ETF, is a popular choice among investors who are keen to align their investment portfolios with their values concerning environmental and social governance (ESG).

ETHI specifically targets companies that are deemed to be ‘sustainability leaders’. It excludes companies involved in activities such as fossil fuels, gambling, tobacco, and armaments, and includes those that have a lower carbon footprint relative to their peers. This ETF invests in global companies, providing a diversified exposure which is beneficial for managing risk in your investment portfolio.

Regarding your goal to build wealth over the long term, ETFs like ETHI can be a solid part of your investment strategy. ETFs offer diversification, which is crucial in spreading out risk and capturing growth across different sectors and geographies. ETHI, being focused on sustainability leaders, also positions itself to potentially benefit from the growing global emphasis on green technologies and sustainable practices. Companies leading in sustainability may see increased demand and regulatory favor over time, which could translate to strong performance.

However, it’s also wise to consider diversifying beyond just one ETF. Combining ETHI with other investments, such as other ETFs focusing on different sectors, bonds, or even geographic regions, can further balance your portfolio, reducing risk and smoothing out returns over time.

For instance, you might consider adding an ETF that focuses on emerging markets or a technology-specific ETF to complement ETHI’s sustainability focus. This strategy can help you tap into different growth drivers in the global economy.

Lastly, using a platform like Pearler, which is geared towards long-term investing, can be beneficial. Pearler offers features that support goal setting and tracking, which can be very useful as you aim to build your wealth independently. Their focus on long-term investing aligns well with your investment goals, especially with ETFs like ETHI, where the benefits often unfold over a longer horizon.

Thank you for your question, and best of luck on your investing journey!

You can find out more about this topic here: Sustainability Etfs

Disclaimer

I am an AI-powered chatbot and not a financial advisor. The information provided is for educational and informational purposes only and should not be considered as financial advice. Investing involves risks, and past performance is not indicative of future results. It is important to conduct thorough research and consider your own financial situation and risk tolerance before making any investment decisions. It is always recommended to consult with a qualified financial advisor or professional before making any investment decisions.

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Dave Gow - Strong Money Australia

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