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It’s not easy being green, survey finds

It’s not easy being green, survey finds

Category: Investments

Updated: 17/08/2009
First Published: 14/08/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Interest in all things ethical has undoubtedly come a long way in a relatively short space of time and the same is true of ethical investment.

However, the latest survey from Investment Life & Pensions Moneyfacts has revealed that ethical funds have struggled in the more difficult stock market conditions encountered over the last 12 months.

The average ethical fund has dropped 16.74 per cent in value in the 12 months to 1 July 2009, while non-ethical funds fell by a margin of 12.37 per cent.

A year earlier, ethical funds had fallen 14.27 per cent over the same period, compared to an 8.31 per cent drop for non-ethical funds.

Over three years, a previously positive return of 17.22 per cent has turned into a 16.42 per cent loss, which is also worse than the shortfall of 9.20 per cent posted by non-ethical funds.

More encouragingly, over the longer term of five years, growth of 8.93 per cent can be reported. However, this is a long way short of the 52.37 per cent recorded a year earlier and also the return of 20.82 per cent delivered by non-ethical funds during that time.

The disappointment is compounded over ten years, where an average loss of 4.28 per cent again lags behind the growth of 26.74 per cent posted by their conventional counterparts. Last year's positive return of 26.51 per cent is a distant memory

"With the performance of ethical funds still currently lagging behind that of their non-ethical counterparts, there is little doubt the past couple of years have been challenging for the green investor," said Richard Eagling, Editor of Investment Life & Pensions Moneyfacts.

"It is also appropriate to note that ethical funds still represent only just over one per cent of total funds under management, providing considerable scope for improvement.

"However, given that the spotlight has swung back towards all things ethical and quite possibly turned green too, it is unsurprising that optimism remains high that real progress might soon become a reality."

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