A survey of 1,100 people with money in ethical trusts, whose total investments range from pounds 2,000 to pounds 2m, found that on average 69 per cent of their assets were in conventional funds, said Dr Alan Lewis of the Centre for Economic Psychology at the University of Bath.
Only 1-in-5 had no "conventional" investment.
Asked about their non-ethical assets, some investors said they felt "ethically driven to bequeath as much as possible to their offspring". Others said it was "a gift or legacy" which they felt uncomfortable about, and which would soon be channelled into ethical funds.
Dr Lewis believes that ethical investors are a growing force who have made a positive decision to accept lower returns in order to follow a moral line. "They are not cranks," he said. "They work in health or education, typically have an income of pounds 50,000 to pounds 60,000, and are middle-aged."
Very few are Conservative voters, but they are more likely to be members of the Roman Catholic Church or Amnesty International, and to read the Guardian newspaper. They are also more common in the south than in the north of Britain.
About half of the investors reckoned that they were getting less money because of their choice. "Ethical investors are committed, but they are not evangelists," said Dr Lewis. "It is part of a lifestyle package."
In tests, more than 80 per cent said they would stay with an ethical investment even if its return was 20 per cent lower than that of an ordinary trust.
The Labour administration is known to be considering offering incentives to ethical investment funds. "If that happens, we expect the market to increase substantially," said Dr Lewis.
"The City is still extremely cynical about it, but that attitude is softening."
The returns on ethical investment funds generally lag behind those of the general market by a few per cent, equivalent to hundreds of pounds annually in sizeable investments.
The first ethical fund in the United Kingdom was launched in 1984, and there are now more than 30 ethical trusts with about 150,000 investors. Their value constitutes less than one per cent of the stock market, but the proportion is growing rapidly.
By comparison in the United States, where such funds were launched much earlier, they constitute about 20 per cent of the investment market.Reuse content