Ethical, socially responsible, green, sustainable or impact investing: call it what you will, there’s never been a greater choice of investment products designed to help your money make a positive change in the world.
Individual Savings Accounts (Isas) are a useful way to stash up to £20,000 each tax year in a wrapper the taxman can’t touch. They remain popular with savers, who poured a record £608 billion into adult Isas in 2017/18. But the focus is shifting. With interest rates on cash Isas pitifully low and the personal savings allowance exempting most people from paying tax on their savings, cash Isas’ popularity has waned, while inflows into stocks and shares Isas have hit new highs.
The Bric group of countries (Brazil, Russia, India and China) captured investors’ imagination back in 2001 when Goldman Sachs’ chief economist at the time, Jim O’Neill, coined the term. This new investment theme spawned a raft of fund launches, and investors piled in. Then in 2010 South Africa joined the group to turn Bric into Brics.
Something scary is bubbling under the surface in financial markets and could blow up into a sub-prime style crisis, leading fund managers have warned. The reason? Investors have become too complacent about macro risks and are behaving as if the era of cheap and easy money will never end.