So, your youngster(s) have just got their cheque for Â£250 from that nice Mr Brown. Now, what to do with it?
Many people will want to put their child’s trust fund into ethical and environmentally sustainable investments. After all, there’s not a great deal of point in them having a pot of money in 18 years time if the planet has gone to hell by then. You want to invest in their future, right?
Unfortunately, the vast majority of CTF accounts do not assess any criteria of ethical, ecological or social responsibility. And, depressingly, most people probably won’t realise that their CTF is being invested in arms, tobacco, environmental destruction and oppression.
So… where are all the CTF funds to cater for our requirements? There is currently only one “ethical” stakeholder account, courtesy of the Co-Op (CIS). [Stakeholder accounts are those which comply with certain standards set by the government, such as a maximum charge of 1.5%pa]. While CIS is to be lauded for being ahead of everyone else, their definition of what counts as “ethical” or “socially responsible” may not be as broad as it first appears. Their investments will apparently go into a FTSE4Good index tracker. This index has inclusion criteria which, while better nothing, are somewhat more lax than many people would like. For example, oil giants BP and Shell are in this index.
So, if you want more control over what use the money gets put to for the next 18 years, you’ll probably have to opt for a non-stakeholder account, which may have higher charges and be more complicated to administer. Even then, there doesn’t seem to be much choice at present. The Children’s Mutual have some options: if you select their non-stakeholder account, Baby Bond Choice, and (after following a maze of links) choose Insight Investments as the fund manager, there are two funds offered: European Ethical, and Evergreen Fund, the latter having more of an ecological emphasis. Their website doesn’t say what the charges are for these accounts. I’ve applied for an information pack and will update this article when I get it.
That’s all I’ve found so far. Please add a comment if you know of any others — there seems to be a general lack of information on this topic at present.
Incidentally, those wanting an eco/ethical CTF are not the only ones facing a lack of choice. The situation is worse for Muslims who wish to comply with Sharia law, as there are currently no suitable CTFs at all.