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Responsible investing has become more and more popular. Thinking about environmental, social and governance (ESG) factors when building a portfolio has become important for many investors.

This is because more people want to take the issues they care about most into account in all aspects of life, including investing. Not only can this have a positive impact on the environment and society, but issues related to the way a company is managed can impact profits and drag down a company’s share price. Overall, responsible investment funds give you the chance to make money in a way that’s in line with your principles.

Legal & General Future World ESG Developed Index invests across developed stock markets while being mindful of ESG issues. It aims to track the performance of the Solactive L&G ESG Developed Markets Index, which is made up of around 1,300 companies based across the globe. Around two-thirds of the fund currently invests in US-based companies, with the rest invested across areas such as Japan, the UK and Europe.

The fund is focused towards sectors such as technology, pharmaceuticals and financials. It won’t invest in tobacco companies, pure coal producers, makers of controversial weapons or persistent violators of the UN Global Compact Principles.

An index tracker fund is one of the simplest ways to invest, and this fund could be a good addition to a broader investment portfolio aiming to deliver long-term growth in a responsible way. The fund has the flexibility to use derivatives which if used adds risk.

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We expect stock markets to grow over the long run, but they’ll fall at times too. While Covid-19 vaccines are now being rolled out, there is still likely to be economic uncertainty associated with the virus and periods of market volatility in the short term.

Total return funds could be considered in this environment. They’re more conservative than funds that invest fully in company shares. They normally invest in a mix of investments including shares, bonds, commodities and currencies. They could provide modest growth over the long term, and help shelter money when stock markets fall, but are unlikely to keep up with stock markets when they rise quickly.

Troy Trojan has a solid long-term track record and is run by experienced fund manager Sebastian Lyon. He focuses on the shares of well-established US and UK companies he thinks offer reliable earnings and good growth potential. The rest of the fund invests in UK government bonds, US inflation-linked bonds - which could provide some shelter from rising inflation - gold and cash. The cash and gold could help provide some ballast when economic and stock market conditions are tougher. The fund has a relatively small number of investments, which means each holding can have a meaningful impact on performance but does add risk. It also has some exposure to higher-risk smaller companies.

We think the fund could form the foundation of a broad investment portfolio, bring some stability to a more adventurous portfolio, or provide some long-term growth potential to a more conservative portfolio.