Ethical Index Funds for a Sustainable Future

Ethical index funds are a great way to invest in a sustainable future, and they're more accessible than you might think.

You can invest in a fund that tracks the performance of the MSCI ACWI ESG Universal Index, which covers over 2,500 companies globally.

This fund excludes companies involved in tobacco, nuclear power, and weapons manufacturing, among others.

By choosing an ethical index fund, you're supporting companies that prioritize environmental and social responsibility, such as renewable energy and sustainable agriculture.

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ESG investing offers a way for you to invest in funds that consider environmental, social, and governance issues.

You may hear the term ESG used interchangeably with "socially responsible investing (SRI)" and "sustainable investing."

ESG investing typically assesses the same factors as socially responsible investing and sustainable investing.

It's worth noting that ESG investing considers environmental, social, and governance issues when making investment decisions.

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Environmental focus is a key consideration for those interested in ethical index funds. Fidelity offers several strategies that prioritize reducing exposure to companies with less favorable environmental ratings.

Fidelity's Strategic Disciplines Environmental Focus Strategy seeks to build a portfolio with reduced exposure to companies with less favorable environmental ratings, while approximating the risk characteristics and pre-tax returns of the Fidelity U.S. Large Cap Index.

This strategy aims to boost after-tax returns in taxable accounts. It's a great option for those looking to minimize their environmental footprint while still achieving their investment goals.

The Fidelity Managed FidFolios Environmental Focus Strategy invests in some of the largest US companies, seeking to reduce their environmental footprint and enhance after-tax returns through tax-smart investing techniques.

Investing in companies that work to remove, reduce, or mitigate the effects of climate change can be a powerful way to make a positive impact. The Fidelity Climate Action Fund invests in companies that are actively working to address climate change.

ESG funds, including the Fidelity Sustainable Core Plus Bond Fund, provide exposure to debt securities of all types believed to have positive ESG benefits. This can be a great way to invest in companies that are making a positive impact.

Investing in companies that work to improve life expectancy, enhance people's lives, and decrease negative environmental impacts can be a great way to make a positive impact. The Fidelity Healthy Future Fund invests in companies working towards these goals.

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Governance and Leadership is a crucial aspect of ethical index funds. Companies that prioritize ethical business practices and board independence are more likely to make responsible investment decisions.

Account and tax transparency is essential for investors to make informed decisions. Fidelity Women's Leadership Fund, for example, invests in companies that prioritize and advance women's leadership and development.

Investing in companies with strong governance and leadership can lead to long-term success. Fidelity Sustainable U.S. Equity ETF evaluates a company's ESG profile to identify current and future sustainable leaders.

Companies that prioritize women's leadership and development, such as those invested in by Fidelity Women's Leadership Fund, tend to have more diverse and effective boards. This diversity can lead to better decision-making and more responsible investment practices.

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Good governance is essential for a company's long-term success. It involves setting standards for leadership, risk controls, and shareholder rights.

Ethical business practices are a must for any company. This means being transparent and honest in all dealings, both internally and externally.

A well-functioning board of directors is crucial for effective governance. This includes ensuring independence and diversity among board members.

Shareholders have the right to know how their company is being managed. This includes having access to information about executive pay and employee pay.

Transparency is key when it comes to company finances. This includes keeping accurate accounts and tax records.

Companies need to be aware that diversification does not guarantee a profit or protect against losses. It's a risk management strategy, not a foolproof solution.

Effective governance involves examining how a company manages its oversight structure, strategy, operations, and internal processes over the long term.

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The Fidelity Women's Leadership Fund, FWOMX, is an investment option that focuses on companies prioritizing women's leadership and development.

Companies that prioritize women's leadership often have more diverse and inclusive boards, which can lead to better decision-making and a more stable workforce.

The Fidelity Women's Leadership ETF, FDWM, is an actively managed ETF that invests in companies advancing women's leadership, offering a unique investment opportunity for those who care about this issue.

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This ETF is a great option for those who want to support companies that promote women's leadership and development.

Vanguard ESG U.S. Stock ETF (ESGV) is another investment option that considers environmental, social, and governance (ESG) standards, including those related to women's leadership and development.

The ESGV fund has a one-year return of 75.2 percent and an expense ratio of 0.12 percent, making it a competitive option for investors.

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You can choose from a variety of investment options that align with your values. For example, the Morgan Stanley Institute for Sustainable Investing found that sustainability funds outperformed other funds during the COVID-19 pandemic.

Some funds are indexed, meaning they track a specific market index, such as the FTSE Social Index. The Fidelity International Sustainability Index Fund (FNIDX) focuses on international equities that rate strongly on the ESG performance scale.

ETFs and mutual funds are available, with options like the ESG U.S. Stock ETF (ESGV) and the FTSE Social Index Fund (VFTAX). These funds offer a range of geographic coverage, from U.S. only to international.

Here are some examples of investment options to consider:

The expense ratio for the Fidelity International Sustainability Index Fund (FNIDX) is 0.2 percent, and the one-year return is 60.1 percent.

The Fidelity Water Sustainability Fund is a unique investment option that focuses on companies helping to deliver safe, reliable, and easily accessible water.

Investing in this fund can provide a sense of security knowing that your money is supporting essential services that millions of people rely on every day.

This fund is part of Fidelity's FLOWX series, which offers a range of sustainability-focused investments backed by decades of research and investment expertise.

By investing in companies that prioritize water sustainability, you're contributing to a more environmentally conscious future.

Some of the companies included in this fund are working to improve water quality, reduce waste, and increase access to clean water for communities in need.

This investment has the potential to yield long-term returns while also making a positive impact on the environment.

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You can invest sustainably with various funds and ETFs that align with your values. Fidelity offers multiple ways to invest sustainably, including funds backed by decades of research and investment expertise.

Some funds, like the Fidelity Sustainable Core Plus Bond Fund (FIAEX), provide exposure to debt securities with positive ESG benefits. The Fidelity Sustainable U.S. Equity Fund (FSEBX) provides insight into current and future sustainable leaders through evaluating a company's ESG profile.

The Vanguard ESG U.S. Stock ETF (ESGV) holds stocks in companies that meet ESG standards set by the government. This fund includes big names like Apple, Microsoft, and Amazon, and has a one-year return of 75.2 percent.

Fidelity also offers an actively managed ETF that provides insight into current and future sustainable leaders through evaluating a company's ESG profile, the Fidelity Sustainable U.S. Equity ETF (FSST).

The Calvert US Large-Cap Core Responsible Index Fund (CISIX) offers investors low expense ratios and board portfolio diversification. Equities in this fund must have met Calvert's strict ESG criteria and SRI investing principles.

Here's a list of some sustainable investment options:

Fidelity's Sustainable Target Date Funds invest primarily in a diversified mix of sustainable assets that adjust over time based on an investor's target retirement date.

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Bond Index funds track a specific market index, such as the S&P 500. This means the fund's performance will closely mirror the index's performance.

The FNDSX, Fidelity Sustainability Bond Index Fund, tracks a benchmark of investment-grade government, corporate, and asset-backed securities from issuers with strong sustainability profiles.

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