What are the best ethical funds to invest in?

Moneyfacts Product Experts undertake an annual review of the ethical funds sector focussing on features, fees and performance. Their whole-of-market analysis is independent, impartial and free to access. After an ethical investment fund has been assessed, it is assigned a Star Rating. Only the very best funds receive five-stars.

• Flexibility of investment amount
• Initial entry charges
• Ongoing charges
• Linked products available
• The level of involvement with the investing companies
• The avoidance of negative investing, including that which benefits from animal testing, armaments, environmental damage and oppressive regimes
• The support of positive investment, incorporating employee welfare/rights, packaging reduction and sustainable forestry.

Looking for the very best ethical funds to invest in?

Click the headings below to see the full list of Star Ratings awarded.

Moneyfacts Product Experts look at monthly performance too.

Here are the best performing funds based on the return generated from a £1,000 investment made over one-year. Please note, past performance is not an indication of future performance. 

^{Source: Lipper/Moneyfacts Investment Life and Pensions Magazine. Note: the table above is ordered by the best performance 1 April 2024 over the past 12 months.}

A guide to investing in ethical funds

What is ethical investing?

Ethical investing is when individual investors choose the assets and stocks they will invest in based on their own ethical values and beliefs. This can exclude firms that operate in areas such as gambling, tobacco, adult entertainment, weapons or alcohol, or by selecting funds that consider a range of ethical factors and/or deliver positive ethical outcomes. These positive ethical outcomes can include social and environmental benefits.

Investors can choose their own investments, selecting stock in individual firms based on analysis of their ethical considerations. However, this is time-consuming and requires regular research to help make sure your choices remain relevant and offer a good return.

Instead, you can opt for a suitable investment fund that aligns with your ethical ideals. These funds will include a range of ethical investments and are based on a set of guiding principles or rules for managing the fund, and you can see which perform best by keeping an eye on our ratings.

Making a choice to invest ethically is not only good for wider society and the environment, but it can be good for your portfolio, too, as ethical investments have been shown to outperform the returns of their non-ethical equivalents.

In July 2020 Moneyfacts revealed that 140 ethical unit trusts had grown by 4% in the 12 months to 1 July 2020, compared to a contraction of 1.5% for those not in the ethical category.