This article is from our Good ISA Guide 2022, which shows you how to invest your ISA for the good of people and planet as well as your own future.
More people than ever are looking to invest their money with a conscience. This means making a positive impact on the wider world as well as aiming for a personal profit.
The investment industry has switched on to this rising demand and you’d now be hard-pressed to find a provider not offering a selection of sustainable or ethical funds. What makes The Big Exchange truly unique in the world of investment platforms is that positive impact is all we do. It’s not an alternative or additional way to invest for us – it’s the way.
Co-founded by The Big Issue and a number of leading asset managers in October 2020, The Big Exchange only lists funds that are proven to be making a tangible positive difference to the planet and society.
We’re passionate about making investing for good accessible to all, and enabling people to understand exactly where their investment is going. We’ve seen an incredible 300 per cent increase in our customer base over the last year and are proud to say that – in sharp contrast to traditional investing trends – half of our investors are women, and 40 per cent are first-time investors.
Through The Big Exchange Stocks and Shares ISA, you can choose to invest in funds that help towards the issues you care about most; whether that’s tackling the climate crisis, finding solutions to the plastic problem, or providing safe housing for vulnerable people. It’s a powerful way to bring about positive change. New research from Nordea Asset Management shows that making your lifetime’s investments more sustainable can have 27x more impact on reducing your carbon footprint than giving up flying or going vegan.
Purely positive impact
Nine funds have recently been added to The Big Exchange, taking the total number of funds available to 60, with five soon to be added. These funds are all rated against the United Nations’ Sustainable Development Goals.
To give a picture of how much impact each investment makes, we use a unique Olympic-style medal system. Every fund on the platform has been awarded a Gold, Silver or Bronze medal, with Gold having the highest ability to provide social or environmental change.
If you’re new to investing, a ready-made bundle of funds is an easy way to invest across multiple positive impact areas. The three bundles on offer – ‘cautious’, ‘balanced’ or ‘adventurous’ – have been put together by independent experts based on how much risk the investments are likely to take over time.
Or, if you want a more hands-on approach, you can pick your own funds from our full list of rated investments. You can rank each fund on performance, cost, or the type of medal they received from our impact assessment.
For those who want to dive a bit deeper, we also provide more detailed information on each fund than is typically available on other platforms. Thefinance industry often makes it extremely difficult to find out what’s behind the funds we invest in. But if we can see what’s in the food we eat by looking at the packaging, why can’t the same be said about our finances?
We aim to change this and have partnered with an innovative company called Tumelo to give our customers 100 per cent transparency on what they’re investing in. With many platforms, investors can see the Top 10 holdings of a fund, but with The Big Exchange you can drill down and see every company within your selection of funds.
We want to put the power in your hands so you can make your money count in line with your personal values.
All our funds go much further than simply avoiding companies involved in damaging industries or that have unethical practices. We want to fund new and existing companies that are proactively working to solve the world’s most urgent problems.
We do a bottom-up stock analysis where we look at every company in a fund, how it behaves, and the type and level of engagement the fund manager has with it.
The ‘Triple Bottom Line’
It used to be a widely-held view that if you put your money to work sustainably, you’d have to take a financial hit. However, increasingly the success of some companies has been linked to their approach to being sustainable.
You can easily see how the funds have performed on The Big Exchange over the last one, three and five years.
All of our funds aim for a triple bottom line; this means a financial return for you, a financial return for society and a financial return for the planet. However, it’s important to remember that investing places your capital at risk and the value of investments can go down as well as up.
Keeping costs low
As well as being fully transparent about what our funds invest in, we’re also transparent with fees. This is because we want to make finance a level playing field for everyone. So no matter how much or how little you invest (you can start from £25 per month or a lump sum of £100), the annual fee on The Big Exchange is 0.25 per cent. We’re proud of this being among the lowest on the market.
As with every other investing platform or bank, on top of this you will also need to pay a fee to the fund manager. This ranges from 0.5 per cent to 1.8 per cent per year. A calculator on The Big Exchange website shows you, in pounds and pence, your expected costs according to how much you invest.
Risk warning: Your capital is at risk, losses from investments are not covered by the Financial Services Compensation Scheme and past performance is not a guide to future performance. Tax treatment is dependent on individual circumstances and is subject to change.