InvestSMART Growth Portfolio and InvestSMART Ethical Growth Portfolio are both designed for investors with an investment time horizon of five years or longer.

They both aim to track the Morningstar® Australia Growth Target Allocation NR AUD+ Index and are categorised as medium to high risk on the Standard Risk Measure.

Explaining how the two portfolios differ starts with defining the meaning of Ethical Investing and how it applies within our investing philosophy.

Broadly, ethical investing involves the consideration of the environmental and social impacts of an investment and not only the financial returns. Generally ethical investing falls into the two categories as shown in the image below.

ESG Screening is the most common method of ethical investing where businesses that are reviewed and fail to pass due to environmental, societal or governance (ESG) reasons are removed from consideration.

Common sectors that are excluded based on this screening process include tobacco, weapons, fossil fuels, gambling, or adult entertainment and most mining companies.

Impact Investing aims to generate positive social or environmental impact alongside financial returns, but financial returns may not be the primary objective.

Investors seek out companies, organizations, or funds that actively contribute to addressing social and environmental challenges. Investments may focus on areas such as renewable energy, affordable housing, clean technology, healthcare, education, or community development.

InvestSMART Ethical Growth falls into the category of ESG Screening. We have researched and selected the best available Exchange Traded Funds in each asset class that exclude investments that fail to pass for environmental, societal or governance reasons.

InvestSMART Growth has does not have any ethical considerations and invests in the best available Exchange Traded Funds for each asset class.