ESG investing at AJ Bell Youinvest

If you're investing for the long-term and can afford to look beyond simple profits and fees, ESG (environmental, social and corporate governance) investing is a great way to contribute to a more sustainable future.

AJ Bell Youinvest has some ESG-focused products and tools on offer, but maybe not the best on the market. See below if you can find a better alternative.

My key findings in a nutshell

My key findings in a nutshell

Gyula Lencsés, CFA

Master of Broker Brilliance | Stock Market • Commodities • Market Analysis

With over a decade in finance, I lead content creation at BrokerChooser and personally evaluated some of our 100+ listed brokers. I open real-money accounts, execute transactions, and engage with customer services, offering firsthand assessments. Prior to BrokerChooser, I managed mutual funds in wealth management, trading stocks, ETFs, bonds, commodities, forex, and derivatives. My goal: simplify the hunt for top brokers in a dynamic investment landscape.

Learn about our methodology

Gyula Lencsés, CFA

Stock Market Maestro | Stock Market • Investment • Market Analysis

I've thoroughly tested AJ Bell Youinvest services with our analyst team by opening a real-money account and these are my most important findings:

• ESG investing focuses on companies' environmental and social practices and impact
• AJ Bell Youinvest offers a decent number of ESG-themed assets to invest in
• AJ Bell Youinvest provides OK tools to find and learn about ESG investments

Data updated on October 10, 2023

If you're investing for the long term, you probably also care strongly about what kind of world will await you in 20 or 30 years. If you have the means to invest in a future that is socially just and environmentally sustainable, then ESG investing may just be right for you.

What does ESG investing mean? It is an emerging investment trend that puts an emphasis on environmental, social and corporate governance factors when picking sectors or individual companies to invest in.

• Environmental criteria focus on how companies work to prevent (or contribute to) pollution, climate change or deforestation
• Social criteria require that companies treat employees, suppliers and customers fairly; do not foster armed conflict or humanitarian crises; and do not aggravate public health problems (like those related to alcohol or smoking)
• Corporate governance criteria involve protecting shareholders' rights, preventing corruption, and demonstrating good leadership practices

It is true that ESG investing requires a few compromises. Thankfully, though, you don't necessarily need to sacrifice returns on your investments, although indirect costs may be higher for some ESG-themed assets.

For more information, check out our in-depth guide to ESG investing, or learn about some useful ESG investing strategies.

You can do your own research to decide whether a particular stock meets ESG criteria, but it's much easier to invest in ESG-friendly stocks via ESG-themed ETFs (exchange-traded funds) or mutual funds. These are often similar to popular index funds (like those tracking the S&P 500), except they assign a bigger share to ESG-compatible stocks in the index, or filter out companies that do not meet certain social or environmental standards.

Here's what AJ Bell Youinvest and its closest competitors have to offer when it comes to ESG-themed instruments:

Data updated on October 10, 2023

How do you know if a stock has a strong ESG record? The easiest way to find out is to use screeners offered by some brokers that help you identify ESG-friendly stocks among the thousands available to trade. If no such screener is available, you can still use the broker's search function (if it's user-friendly enough) to find ESG-focused ETFs or mutual funds. In addition, some brokers have educational material like articles or webinars on ESG investing.

Here's how we rated these tools at AJ Bell Youinvest and some of its immediate competitors:

Data updated on October 10, 2023

Do you want to zoom out and pick the best broker for long-term investment based on a full set of criteria including fees, trading platform experience and product selection? Look no further than our list of the best brokers for ESG investing.