Most ethical big 5 Canadian bank?
December 16, 2015 10:06 PM Subscribe
I'm looking to invest a bit of money, and for various reasons, I will be investing in one of the big 5 Canadian Banks (RBC, TD, CIBC, BMO, or Scotia). I've been looking around on the internet, but I've been having a hard time figuring out which one of these five banks is the most ethical in terms of its investment policies.
I know the big 5 are overall less ethical than say, credit unions, but is there one or two out of these five that would be better to invest in than the others? Any sources/articles to read would be great, too.
I know the big 5 are overall less ethical than say, credit unions, but is there one or two out of these five that would be better to invest in than the others? Any sources/articles to read would be great, too.
Look for Ethical Funds. I imagine most of the banks have some ethical funds available.
posted by Coffeetyme at 6:20 AM on December 17, 2015
posted by Coffeetyme at 6:20 AM on December 17, 2015
Response by poster: Yes, clarification, looking for info on the bank's investing policies in terms of mutual funds etc
posted by twill at 7:30 AM on December 17, 2015
posted by twill at 7:30 AM on December 17, 2015
Best answer: Canadian banks (or rather, their investment/asset management arms as these are technically and legally separate from their retail deposit-taking bank) manage a wide variety of mutual funds and other investment vehicles.
So, just to latch on to mutual funds as an example - some these are managed directly by their own teams. Others are managed by third-party managers (overseen by the bank's own investment committees who evaluate that manager's performance) and are branded as a bank investment products. Others are a pool of different funds/portfolios that are each managed differently.
The investment objectives will vary from fund to fund, so even within a given bank's offerings of "ethical" or "socially responsible" investments you might or might not find things you object to.
To really get into whether or not you personally find a given fund's investments "ethical" (many are branded as such, but YMMV on whether or not this meets your criteria), you'll have to do a bit of research.
You'll find the information you need in the annual report for any fund you're looking at.
So, just Googling up a random example:
RBC Jantzi Balanced Fund:
Investment Objective
To provide long-term capital growth, with a secondary focus on modest income by investing primarily in Canadian, U.S. and international equities and fixed income securities. The fund follows a socially responsible approach to investing.
Now, to figure out if their definition of "socially responsible" meets yours, you'd need to look at the annual report for that fund:
Annual report (pdf) - this lists all of the investments held in that fund's portfolio.
Now, quickly looking over that list:
If you have an issue with the tar sands, to pick one example of an issue, you might object to your money being invested in Suncor, whose common shares they hold.
Is Finland's foreign policy something that keeps you up at night? Well, this fund holds EUR-denominated Finnish government bonds maturing in 2028.
So, this is the case-by-case evaluation based on your own ethical concerns as compared to where that fund is putting the money that's invested in it that you might need to do if this is important to you.
posted by mandolin conspiracy at 9:20 AM on December 17, 2015 [2 favorites]
So, just to latch on to mutual funds as an example - some these are managed directly by their own teams. Others are managed by third-party managers (overseen by the bank's own investment committees who evaluate that manager's performance) and are branded as a bank investment products. Others are a pool of different funds/portfolios that are each managed differently.
The investment objectives will vary from fund to fund, so even within a given bank's offerings of "ethical" or "socially responsible" investments you might or might not find things you object to.
To really get into whether or not you personally find a given fund's investments "ethical" (many are branded as such, but YMMV on whether or not this meets your criteria), you'll have to do a bit of research.
You'll find the information you need in the annual report for any fund you're looking at.
So, just Googling up a random example:
RBC Jantzi Balanced Fund:
Investment Objective
To provide long-term capital growth, with a secondary focus on modest income by investing primarily in Canadian, U.S. and international equities and fixed income securities. The fund follows a socially responsible approach to investing.
Now, to figure out if their definition of "socially responsible" meets yours, you'd need to look at the annual report for that fund:
Annual report (pdf) - this lists all of the investments held in that fund's portfolio.
Now, quickly looking over that list:
If you have an issue with the tar sands, to pick one example of an issue, you might object to your money being invested in Suncor, whose common shares they hold.
Is Finland's foreign policy something that keeps you up at night? Well, this fund holds EUR-denominated Finnish government bonds maturing in 2028.
So, this is the case-by-case evaluation based on your own ethical concerns as compared to where that fund is putting the money that's invested in it that you might need to do if this is important to you.
posted by mandolin conspiracy at 9:20 AM on December 17, 2015 [2 favorites]
Also, a few articles on socially responsible investing here:
Good corporate citizen, better investment
Taking notice of socially responsible investing
How Sustainable is the Jantzi Social Index?
posted by mandolin conspiracy at 9:28 AM on December 17, 2015 [1 favorite]
Good corporate citizen, better investment
Taking notice of socially responsible investing
How Sustainable is the Jantzi Social Index?
posted by mandolin conspiracy at 9:28 AM on December 17, 2015 [1 favorite]
We asked our financial person at RBC about ethical funds and she had no clue why we would be interested in that. She said ethical funds were a fad and all their funds are socially responsible. There could actually be some good funds out there but the front line staff we dealt with didn't know about them.
posted by betsybetsy at 5:25 PM on December 17, 2015
posted by betsybetsy at 5:25 PM on December 17, 2015
Timely. The Walrus just published this one:
The Root of All Evil: Like it or not, you're investing in sin stocks
posted by mandolin conspiracy at 4:51 PM on December 21, 2015
The Root of All Evil: Like it or not, you're investing in sin stocks
posted by mandolin conspiracy at 4:51 PM on December 21, 2015
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posted by megatherium at 4:43 AM on December 17, 2015