Ethics Newsline®

LONDON
A new report from a British market analysis firm shows that so-called ethical funds, far from being just a feel-good fad, are surging ahead of many traditional funds.

The Scotsman reports that a survey from Investment, Life & Pensions Moneyfacts showed that over the past 12 months the average ethical fund has grown 18.3 percent, compared to 13.7 percent for standard funds.

Ethical funds, which generally screen the companies in which they invest — typically avoiding firms involved in such areas as gambling, animal testing, tobacco, weapons, or activities destructive to the environment — have almost tripled their sales in the past three years, according to an analysis from the U.K. Guardian.

Richard Eagling, head of the firm that undertook the study, told the Reuters news agency that the latest results “helped to shatter the misguided belief that ethical investments will always underperform traditional investment funds and that sustainable business practices restrict company growth.”

In addition, reports the London Stock Exchange in its online newsletter, ethical investors are showing an increasing level of sophistication, becoming well versed in ethical issues and not being taken in by “greenwash” — ethical labels misleadingly and randomly slapped onto various financial vehicles.