Ethical funds 'hit harder in crunch'

By Sarah Engle, Thu 11 Sep 2008 - Published in Banking

Ethical funds have on average lost more money than their non-ethical counterparts during the credit crunch, it has been revealed.

According to Moneyfacts, volatile markets are hitting investors hard, with ethical funds losing out on one, five and ten-year comparisons.

Richard Eagling, editor of Investment Life & Pensions for Moneyfacts, said missing out on the price increases in oil and gas has been one factor in the reduced performance of ethical funds.

"The fact that ethical funds tend to have a stronger bias towards smaller and medium sized companies has also had a significant impact," he added.

Despite this, he commented, although recent ethical returns may be disappointing, there are reasons why this situation is only "a temporary blip".

In related news, the Ethical Investment Association has praised those fund providers which have worked hard to provide transparency in green and ethical investment.

The group has said it looks for clarity and openness in financial dealings to help customers and financial advisers make informed decisions on investments.

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