Ethical investments out-perform FTSE

Wednesday, 31 May 2006 12:00

People putting money in socially and environmentally friendly companies can still receive strong profits, new data finds.

Figures out today from Co-operative Insurance demonstrate that its ethical fund has outperformed UK stocks and most UK unit trusts over the last three years.

And this performance becomes all the more impressive when the fact that rises in the FTSE have been driven by sectors including defence and oil, which are excluded from the majority of ethical funds.

“These results show that choosing to invest in a socially responsible and ethical way can actually improve investment returns,” said Co-operative Bank fund manager Mike Fox.

“Healthcare, the environment and the requirement for companies to behave in a sustainable manner are issues that are growing in importance,” he added.

Interest in ethical funds has increased in the UK. In 2004 some £5.5 billion was invested in ethically-screened funds, up 30 per cent on the previous year.

The CIS Sustainable Leaders Trust, Co-operative Bank’s ethical fund, has returned 83.7 per cent in the three years to April 30th, compared with a 75.4 per cent return for the average UK unit trust and 79.6 per cent increase in the FTSE All-Share index.

The fund also out-performed both benchmarks in the last year.

“These impressive performance numbers should be seen in the context of a period when oil and armament stocks have reached near record highs,” Mr Fox noted.

“The outlook for socially responsible and ethical unit trusts is very positive,” he concluded.

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