Newspaper article The Evening Standard (London, England)

Green Light for Ethical Investments; Try a Punt on These Funds for Good Returns -- and a Clear Conscience

Newspaper article The Evening Standard (London, England)

Green Light for Ethical Investments; Try a Punt on These Funds for Good Returns -- and a Clear Conscience

Article excerpt

Byline: Lucy Tobin

[bar] THE aftermath of the last economic crisis, and more awareness of the impact corporates have on the environment after catastrophes like BP's Gulf of Mexico disaster, have pushed Britons' investment in ethical funds to a record high.

More than [pounds sterling]11.3 billion is currently invested in ethical or sustainable funds, according to EIRIS, the ethical investment research group -- up from just [pounds sterling]4 billion in 2001. The Investment Management Association adds that sales into UK ethical funds rose by 25% in the second quarter of 2011 compared with the same time a year earlier.

"We've seen a huge increase in the amount of money being invested ethically," says Mark Robertson of EIRIS. "Since the credit crunch, people are better informed about the impacts their spending and investments can have, and more are turning to ethical investment which takes a longer-term approach."

Traditionally, investors have worried about lower returns from green funds -- but that's no longer necessarily the case. Over the past five years, the bestperforming ethical fund, Kames' Ethical Equity A (formerly known as Aegon Ethical Equity) returned 6.65%, nearly double the average 3.78% return on UK All-Companies funds over that period, according to data from Morningstar.

Over the past year, the best-performing fund has been Ecclesiastical's Amity UK A, paying 2.11%, compared with the return on an average of UK company funds at minus 2.35%. But they haven't all performed well. Morningstar figures show the worst-performing socially conscious funds over five years, the Pru ethical trust, is down 28.17%, compared to the average 3.78% return.

HOW TO PICK A FUND First, decide what your ethical requirements are: each fund has a different approach to investment, as well as risk level. "Over the last five years, we've seen a shift from negative screening and avoidance criteria towards more positive investment styles," says John Ditchfield, director of Barchester Green, an independent financial adviser specialising in ethical investment. "Within those, there are 'lighter green' and 'darker green' funds, with varying criteria. …

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