3 Top Rated Funds for Ethical Investors

Socially responsible investments have outperformed the FTSE 100 over the past five years. To mark Ethical Investment Week we highlight the best sin-free equity funds

Emma Wall 19 October, 2015 | 1:30PM

Ethical investing is a considerably broader sector than many imagine. Traditional ethical funds – referred to as “dark green”, do take a very restrictive approach to investing, screening out stocks that are involved in “unethical” industries such as alcohol, animal testing, tobacco, oil and armament firms.

Funds that follow the socially responsible investment (SRI) route invest in companies that adopt good environmental and social practices regardless of sector. This gives managers a wider choice of stocks, which can help boost returns and reduce volatility.

And as well as doing good these funds can deliver good-looking returns too. According to AXA Wealth the FTSE4Good UK ethical benchmark beat the FTSE All Share Index, returning 48% versus 43% over the past five years.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Emma Wall  is former Senior International Editor for Morningstar

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