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Ethical Funds More Popular than Ever
Recent figures show the amount of money invested in ethical funds reached an all time high of £5.9 billion at the end of 2007, up from £4.9 billion in 2006 and a five fold
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Buy your fund from Hargreaves Lansdown and save up to 5.5% on the initial fund charges.
| Popular funds | Initial savings |
Buy fund |
|---|---|---|
| Jupiter Emerging European Opportunities | 5.25% |  |
| Schroder UK Alpha Plus | 5.25% | |
| Neptune Income | 5.00% | |
| Allianz Global Investors RCM BRIC Stars | 4.00% | |
| First State Investments Greater China Growth | 3.75% | |
Investment values can go down in value as well as up and you may get back less than the amount you invest.
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Clearly interest in socially responsible investing has increased. Raised awareness of ethical and environmental issues and strong performance across many funds has led to more assets under management. This should help encourage further investment in these funds and more money coming into a sector can help drive share prices higher. We believe both existing and new investors should benefit.
Increased Green Legislation Should Create Investment Opportunities
In February the EU passed legislation to slash carbon emissions by 20% by 2020. The intention is for similar legislation to be enforced across all industrialised nations. Much of Alistair Darling’s recent budget focused on raising green taxes, by focusing on heavier polluting cars and increasing aviation tax, but there was also intention to make all new non-domestic buildings zero carbon rated by 2019 and all new homes to be carbon neutral by 2016.
The message is clear. Carbon emissions need to be reduced and in order to meet these targets there will have to be changes. Companies that can provide a solution are well placed to profit as businesses and people are forced to adapt. This could create some excellent investment opportunities and fund managers are looking to benefit.
Climate Change Funds – is the Investing Environment Changing?
One area that has seen inflows is climate change funds. As we expected the number of funds investing in this area has grown and over the last six months there have been six new fund launches. Each of these funds has varying degrees of focus on climate change but if you are investing for ethical reasons bear in mind that the mandate of some of these funds can differ from a typical Socially Responsibly Investment (SRI) fund.
For example, many climate change funds are able to invest in nuclear power, as this energy is a cleaner alternative to burning fossil fuels. Many ethical funds, however, apply an exclusion policy on nuclear power, given the implications of nuclear waste disposal and uranium mining.
We suggest investors who would like to hold an ethical fund that addresses a particular matter use our Ethical Fund Comparison Tool to find a fund with such a policy.
What are our favourite Socially Resonsible Investment Funds?
Following extensive and ongoing research of the SRI fund universe we have selected three of them for the Wealth 150, a list of our favourite funds in each sector. Each offers investors something different. Aegon Ethical Equity is a UK growth fund, while F&C Stewardship Income may appeal to investors seeking income. Jupiter Ecology is a global growth fund investing in companies in six key environmental sectors.
» Key Features of the Aegon Ethical Equity Fund
» Key Features of the F&C Stewardship Income Fund
» Key Features of the Jupiter Ecology Fund
Fund research is provided by Hargreaves Lansdown. Hargreaves Lansdown is an independent broker offering unit trust, stockbroking and other pension and investment services. No news or research item is a personal recommendation to deal.