Ethical investment funds outperform non-ethical rivals

28th July 2020


Istock 1155242798

Related Topics

Related tags

  • Ethics ,
  • Global ,
  • Investment ,
  • Sustainability

Author

Susanne Meenan

Ethical investment funds have outperformed their non-ethical counterparts over the last year during the coronavirus crisis, new research by Moneyfacts has uncovered.

The findings show that the average ethical fund has produced returns of 4.3% over the last year, compared with an average loss of 1.5% generated by their non-ethical rivals.

The performance of some ethical funds is even more impressive, with the average ethical global fund up by 14.9% over the last year, easily eclipsing the 3% growth rate of non-ethical global funds.

Moneyfacts said that the superior investment returns of ethical funds should make them attractive to all investors, and not just those that are looking to align their financial decisions with their own values.

“For any serious investor, sustainably-minded or not, the strong performance of ethical funds is now impossible to ignore,“ said Richard Eagling, head of pensions and investments at Moneyfacts.

“The argument that investing responsibly must mean a trade-off between value and values or profits and principles has been increasingly debunked in recent years and the latest results provide further clear evidence to refute it.“

Moneyfacts examined the performance of ethical funds versus conventional non-ethical funds, and also compared ethical funds within the four Investment Association sectors that contain the most ethical funds (£ Corporate Bond, Global, Mixed Investment 40-85% Shares and UK All Companies).

The figures show that ethical funds outperformed their conventional rivals in 19 out of the 25 scenarios analysed across a range of investment periods.

Over three years, the average ethical fund has produced growth of 18.4%, more than double the 8.5% of growth generated by the average non-ethical fund.

For the 10-year and 15-year results, ethical funds have returned 134.4% and 202.4% respectively, a significant improvement on the average non-ethical fund returns of 103.4% and 155.7% respectively.

“The momentum behind responsible investing has been steadily building for some time, but there is a sense that a raft of new initiatives, changing regulation and some truly impressive sustainable fund performances could prove a catalyst for further growth,“ Eagling added.

Image credit: iStock

Subscribe

Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.


Transform articles

IEMA’s deputy CEO reflects on announcements and controversy at COP28

With the first week of COP28 drawing to a close, IEMA’s deputy CEO, Martin Baxter, reflects on some of the key announcements made so far, addresses the controversy surrounding the climate summit, and highlights what to look out for in the second week.

7th December 2023

Read more

Groundbreaking research warns that the models used by the finance sector to predict climate scenarios could easily sink our retirement pots… and the global economy. Huw Morris reports

30th November 2023

Read more

IEMA CEO Sarah Mukherjee MBE talks to food campaigner Henry Dimbleby MBE about improving the UK’s health, tackling poverty, shaping government policy and transforming agriculture

30th November 2023

Read more

A thought-provoking discussion on the future of zoos took place at the Royal Geographical Society in London last night, featuring a star-studded panel of conservation experts.

30th November 2023

Read more

Individual action or systems change? Which is the best route to net zero? Sophia Mwema weighs up the options

30th November 2023

Read more

The Labour Party’s climate policy team took part in a panel discussion with IEMA representatives at Westminster this morning, outlining what they plan to do should they win the next general election.

29th November 2023

Read more

Chancellor Jeremy Hunt unveiled the “biggest permanent tax cut in modern British history” in his autumn statement today, as well as significant investment for the net-zero transition.

22nd November 2023

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close