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principles and performanceIntroductionInvestors are increasingly keen to balance their desire for investment performance with maintaining a clear conscience – and with a growing choice of ethical investments and changing corporate attitudes there need be little compromise.Many investment experts now fundamentally believe that investment companies which manage their businesses in the most responsible manner are also likely to see some of the strongest share price performance in future years. This incentive is good news for investors seeking to invest ethically.Green performance envyThe myth that, by choosing ethically, you sacrifice returns, is being dispelled by the performance of many ethically managed funds.Approaches used within ethical funds vary and so do the levels of success they achieve. You need to select an offering which both matches your ethical needs and also looks well placed to deliver the investment returns you are looking for. After all, even the most ethical investor intends to make money. There remains a wide degree of divergence between the levels of success achieved by ethical funds, and investment options should be assessed in the same way as other investment funds. Guilt-free returnsThe chart below shows how a lump sum of £1,000 would have performed if it had been invested for one, three, five and ten years in different investment fund sectors.
Source: Lipper Hindsight 5. Figures based on offer price (buying price) to bid price (selling price) with any net income reinvested to 29 August 2008. Past performance is not a guide to future performance. Remember that stock market based investments should be considered as longer term investments - over a period of 10-15 years market fluctuations even out to produce more favourable returns. Your financial adviser will be able to lend a guiding hand to help you choose the right ethical investments for your own investment needs.
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