What Are The Best Ethical Funds In 2022? | moneyfacts.co.uk

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Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 23/03/2022

Ethical investing explained

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 range from excluding specific 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, and there’s been a clear focus on sustainability in recent years, with many investment firms offering funds that highlight their green credentials.

How to invest ethically

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.

Why invest ethically?

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.

How do we decide which ethical funds get the best rating?

Every 12 months, the Moneyfacts product specialists take an in-depth look over the ethical funds sector to determine which are judged worthy of our coveted four and five-star ratings. Many different elements are carefully weighed and judged in comparison with the other products currently available to determine which ethical funds are truly leaders in their class when it comes to the benefits they provide to consumers.

The Moneyfacts Star Ratings are an impartial and highly respected overview of many categories of financial products, valued by professionals, providers and consumers alike. The features and benefits of each ethical fund that we examine are expanded on in the ‘What elements of ethical funds do we look at?’ section below.

How does a star rating help me find the best ethical funds?

Moneyfacts Star Ratings are both independent and impartial. We can provide consumers with an expert analysis for the whole market and our views are completely unbiased, so you can have confidence that the ethical funds we score highly really are among the best that can be found.

What elements of ethical funds do we look at?

A wide range of features are considered in the final star rating awarded to an ethical fund product. These include:

  • 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.

 

Only the very best funds meet our strict criteria; you can see which have been awarded a four and five-star rating below. And, if you’re more concerned with performance levels on a rolling basis, read on to find the best-performing ethical investments each month.

Ethical Funds - Five Stars

Moneyfacts Ethical Funds Star Rating Logo 2022

ASI Ethical Corporate Bond Fund
ASI Europe ex UK Ethical Equity Fund
ASI UK Ethical Equity Fund
BMO Responsible Global Equity Fund
BMO Responsible Sterling Bond
BMO Responsible UK Equity Growth Fund
BMO Responsible UK Income Fund
EdenTree Responsible & Sustainable European Equity Fund
EdenTree Responsible & Sustainable Global Equity Fund
EdenTree Responsible & Sustainable Managed Income Fund
EdenTree Responsible & Sustainable Sterling Bond Fund
EdenTree Responsible & Sustainable UK Equity Fund
EdenTree Responsible & Sustainable UK Opportunities Fund
Janus Henderson Global Responsible Managed
Janus Henderson Global Sustainable Equity
Janus Henderson UK Responsible Income
Jupiter Ecology
Liontrust Sustainable Future Cautious Managed Fund
Liontrust Sustainable Future Corporate Bond Fund
Liontrust Sustainable Future Defensive Managed Fund
Liontrust Sustainable Future European Growth Fund
Liontrust Sustainable Future Global Growth Fund
Liontrust Sustainable Future Managed Fund
Liontrust Sustainable Future Managed Growth Fund
Liontrust Sustainable Future UK Growth Fund
Liontrust UK Ethical Fund
Premier Miton Responsible UK Equity Fund

Ethical Funds - Four Stars

Aegon Ethical Cautious Managed OEIC
Aegon Ethical Corporate Bond Fund OEIC
Aegon Ethical Equity Fund OEIC
BMO Sustainable Universal MAP Adventurous Fund
BMO Sustainable Universal MAP Balanced C Acc Fund
BMO Sustainable Universal MAP Cautious C Acc Fund
BMO Sustainable Universal MAP Defensive Fund
BMO Sustainable Universal MAP Growth C Acc Fund
Jupiter Responsible Income
Royal London Sustainable Managed Growth
Royal London Sustainable Managed Income

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What are the best ethical investments in May 2022?

Here are the best performing funds based on the return generated from a £1,000 investment made over one-year. Always remember that past performance may not be repeated in the future.

Rank

Fund

Value of £1,000 lump sum over one year (no charges applied)

Growth %

1

T. Rowe Price Global Natural Resources Equity - Class C - Account 9 (GBP)

£1,237

23.7%

2

FSSA Indian Subcontinent All-Cap B Acc - GBP

£1,223

22.3%

3

BNY Mellon Global Infrastructure Income - Class W - Income GBP

£1,188

18.8%

4

Stewart Investment Indian Subcontinent Sustainability - Class B - GBP

£1,170

11.7%

5

Inv India Eq A AD USD

£1,160

16.0%

Source: Lipper/Moneyfacts Investment Life and Pensions Magazine. Note: the table above is ordered by the best performance 1 May 2022 over the past 12 months.

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Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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