Every year around this time, I get some version of the same question from nurses:

“Can I invest ethically and still make money?”

And underneath that question is a bigger one:

“If I care about how my money is invested… am I sacrificing returns?”

The internet loves to frame ethical investing as:

• Lower performance

• Tree-hugger portfolios

• Feel-good, low-growth funds

That narrative is outdated.

But here’s what I want to do differently:

Not hype.

Structure.

Let’s walk through a real example and think like investors... not influencers.

📊 First: Do Ethical Funds Actually Perform?

Data from large institutional research (including studies from Morgan Stanley’s Institute for Sustainable Investing) has shown that sustainable funds have, in many periods, matched or even outperformed traditional funds.

In certain downturn years, some sustainable funds experienced slightly smaller drawdowns.

That does not mean:

• All ethical funds outperform.

• They are safer.

• They are morally pure.

It means performance is not automatically sacrificed.

But “ethical” is not a regulated term with one definition.

And that’s where it gets interesting.

🧠 Let’s Examine a Real ETF

Today’s example:

First Trust Bloomberg Emerging Market Democracies ETF (Ticker: EMDM)

This is not a “clean energy” ETF.
It’s not fossil-free.
It’s not a sin-stock exclusion product.

It screens countries based on democratic governance and institutional strength.

That’s a very different lens.

🏛️ What Makes This Fund “Ethical”?

Instead of screening companies for environmental impact alone, EMDM focuses on:

• Electoral democracies

• Institutional stability

• Rule of law

• Political risk levels

The theory is simple:

Stronger democratic institutions →
Lower political instability →
More stable capital markets →
Stronger long-term equity performance.

There is academic research supporting this relationship between democracy and stock market returns in emerging markets.

It’s not a vibes-based strategy.

It’s a governance thesis.

📈 What Does the Portfolio Actually Look Like?

Let’s zoom in.

Top Sectors:

• Technology (~29%)

• Financial Services (~29%)

• Basic Materials (~15%)

This is not a niche “green” portfolio.

It’s heavy in technology and semiconductors.

Top Holdings:

• Samsung Electronics

• Taiwan Semiconductor Manufacturing (TSMC)

• Grupo México

• SK Hynix

These are massive global industrial players.

Some power AI infrastructure.
Some support electrification.
Some are mining and materials companies.

Is mining environmentally perfect?

No.

Is it necessary for infrastructure, electrification, and clean energy transitions?

Yes.

Ethical investing is often about trade-offs.

Not purity.

🌎 Country Exposure

Top countries include:

• South Korea (~20%)

• Taiwan (~15%)

• Brazil (~14%)

South Korea is often considered “emerging” in classification but structurally behaves closer to developed markets.

Taiwan introduces geopolitical risk.
Brazil adds commodity and political volatility.

This is not a conservative fund.

Its risk score is high.
Emerging markets are volatile by nature.

This is aggressive capital.

📊 What About Performance?

Over the past year, EMDM has had a very strong run, significantly outperforming the S&P 500 in that window.

Zooming out to a longer time horizon, returns look more similar to the S&P 500 over multi-year comparison periods.

Important nuance:

Much of the recent performance has been driven by concentrated exposure to semiconductor companies like Samsung and TSMC.

That concentration can fuel outperformance in tech-led markets.

It can also amplify downside in tech downturns.

This is not broad, evenly distributed return.

It’s concentrated exposure.

🚨 Things You Should Know (That Influencers Won’t Always Say)

1️⃣ This fund still has oil and gas exposure (under 15%).
It is not fossil-fuel free.

2️⃣ It is a newer ETF.
Limited long-term performance history.

3️⃣ It is aggressive.
Emerging markets can swing hard.

4️⃣ Ethical does not mean risk-free.

5️⃣ Ethical definitions vary by person.

Some nurses won’t invest in alcohol companies.
Some won’t invest in weapons.
Some won’t invest in fossil fuels.
Some draw the line elsewhere.

There is no universal standard.

🩺 So… Where Does This Fit in a Portfolio?

Not core.

This is a satellite position.

Your core should typically be:

• Broad U.S. index exposure

• International diversification

• Retirement account foundations

• Pension (if applicable)

A fund like EMDM could sit in:

• A small allocation to emerging markets

• A long-term growth sleeve

• A higher-risk satellite allocation (5–10% range, depending on risk tolerance)

Not 40%.
Not your retirement backbone.

Satellite.

🧠 The NurseMoneyDate® Take

The real question isn’t:

“Is this fund ethical?”

The real question is:

Does this align with:

• My values?

• My risk tolerance?

• My time horizon?

• My portfolio structure?

Ethical investing is not about perfection.

It’s about alignment.

And alignment does not require sacrificing intelligence.

You can:
Care about governance.
Care about democracy.
Care about institutional strength.

And still demand:
Diversification.
Risk awareness.
Long-term strategy.

💗 Final Thought

If I were guiding a nurse through this decision, I would say:

You can absolutely invest ethically.

But do it inside structure.