Ethical investments 'struggling'

Volatile conditions in the stock market have had a negative impact on ethical investment funds, with such securities being worst-affected by the recession.

Investment Life & Pensions Moneyfacts analysed the performance of ethical funds, other investment products and the FTSE 100 over the last ten years.

Results revealed that over different investment periods in the last decade, ethical investments have struggled and have fared worse in the last 12 months.

According to the data, ethical funds have dropped by more than 16 per cent in value since July 2008, while non-ethical funds have fallen by just 9.2 per cent in this time.

Looking at figures from the last ten years, ethical investment has posted a loss of 4.28 per cent. In contrast, non-ethical funds have grown by more than 26 per cent.

Richard Eagling, editor of Investment Life & Pensions Moneyfacts, said: ’Just two years ago, the defence for ethical fund performance was strong, with returns outstripping those of their non-ethical rivals.

’Unfortunately, the performance of ethical funds is now lagging behind that of their non-ethical counterparts.’
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