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NEST Ethical Fund

NEST Ethical Fund is for people who have specific concerns about the impact that organisations have on the environment and society, for example in areas such as human rights and fair trade. Members choosing this fund want to invest in companies with a positive record on these issues. They also want NEST to make decisions for them about the type and amount of risk they take with their money.

Find out more about the ethical investment policy that applies to this fund by downloading the fund brochure (PDF).

What the fund tries to achieve

NEST Ethical Fund invests in companies with positive records on:

  • human rights
  • fair labour practices
  • fair trade policies, especially with developing countries
  • the environment

The fund avoids companies that:

  • manufacture tobacco products
  • cause damage to the environment
  • are involved in the manufacture of arms and weapons of mass destruction
  • co-operate with corrupt states and those with a bad human rights records

Although we try to manage the risks and returns members get in the Ethical Fund, members who invest in this fund are usually exposed to slightly higher risk than with NEST Retirement Date Funds. This is because this fund is invested in fewer companies and asset classes than the NEST Retirement Dates Funds.

What the fund invests in

NEST Ethical Fund invests in:

  • shares in companies around the world that are seen to have an overall positive effect on the world
  • ethical corporate bonds
  • UK government bonds linked to the Retail Price Index, which is a measure of inflation. This means the regular interest payments change with the rate of inflation, but the amount of the bond stays the same
  • conventional UK government bonds
  • sustainable property in the UK

How the fund tries to grow members’ money

The fund aims to grow members’ money faster than inflation while taking the right amount of risk at the right points throughout a member’s time saving. It follows a three stage lifecycle in a similar way to the NEST Retirement Date Funds.

Younger members’ money will be invested in less risky assets. As they get older we’ll invest more in company shares, which are riskier but tend to be a quicker way to increase the value of members’ retirement pots. We think this is the right time to try and grow the value of members’ pots by taking more risk. However, we still aim to protect it from sudden falls.

As a member approaches the year they’re expected to retire, we reduce the amount of investment risk they’re exposed to. We do this by moving more of the fund into less risky investments, such as UK government bonds.

Glidepath of the NEST Ethical Fund

A graph showing how the investment risk of the NEST Ethical Fund increases and decreases over the three phase lifecycle.

Changing funds

To choose one of the fund choices instead of the NEST Retirement Date Funds, members need to log into their online account and go to ‘Retirement pot’.

See where this fund is invested

To find out where this fund is invested and how it’s performing, read the latest Quarterly investment report.