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Guide to impact investing

    Guide to impact investing


    Investing along ethical or environmental concerns has been around for decades, but not every investor or adviser wants to simply screen out what some might consider to be ‘bad stocks’.

    Impact investing, which aims to provide a visible, positive effect in society - such as preventing recidivism or improving employment prospects for underprivileged teenagers - also promises to deliver a positive return for investors.

    While it is still a nascent asset class, could impact investing become a mainstream way for clients to invest in line with their principles as well as making a financial return - and what are the various risks involved?

    This guide covers the origins of impact investment and its growth in the US and the UK; whether it is able to make the leap from high-net worth investors to mass affluent retail investors; how retail investors might be able to use impact investments or seek suitable alternatives; and ways advisers and clients can measure the actual impact and performance of such funds.

    Contributors of commentary to the guide are: Lisa Beauvilain, director and head of ESG and sustainability for Impax Asset Management; Amanda Young, head of responsible investing for Standard Life Investments; Bertrand Gacon, head of impact investing and SRI for Lombard Odier; Daniel Brewer, managing director of Resonance; Jon Hale, head of sustainability research for Morningstar; John Ditchfield, partner at Castlefield Advisory Partners; Social Finance; Case Foundation; Big Society Capital; Ethex; Investment Association; Columbia Threadneedle; Association of Investment Companies; HM Revenue & Customs; and The Global Impact Investing Network.

    In this guide


    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. To whom is the phrase ‘impact investing’ ascribed?

    2. Ms Young believes investors should give up any alpha as a consequence of investing for impact. True or false?

    3. To which sector of society is impact investing most appealing, according to Mr Gacon and Ms Young?

    4. When did Columbia Threadneedle launch its Social Bond Fund?

    5. What can certain investments in social impact bonds also qualify for?

    6. How many global socially conscious funds are covered by Morningstar Ratings?

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