Ethical investments growth beats FTSE 100 returns
New research from Moneyfacts suggests that investments in green companies are not providing a positive return for those looking to remain environmentally friendly.
Conducted by Moneyfacts, the report showed that while investments in the FTSE 100 saw a 24.47 per cent dip in returns in the last year, ethical funds only saw a 16.74 per cent fall.
Index tracker funds have also taken a beating in the same period, seeing a 19.33 per cent fall.
Those who have made ethical investments over the past five years have even seen a positive return on average, with the figure standing at 8.93 per cent in the Moneyfacts report, again beating the FTSE 100 at -4.81 per cent.
However, Richard Eagling, editor of investment life and pensions for Moneyfacts, believes that non-ethical investments which do not include the FTSE 100 or index trackers are performing better.
"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."
He added: "Although there is little doubt the past couple of years have been challenging for the green investor, the long-term outlook for the ethical sector remains positive."
A consultation was launched last month for a government bank which is to focus on providing ethical investment projects.
Announced by the chancellor in his annual Budget report in April, the 12-week consultation will discuss how the body, called the Social Investment Wholesale Bank, will work.
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