Five questions about: Ethical funds

Don't ethical funds mean giving up investment performance to salve your conscience?

Not necessarily. Plenty of funds with an ethical stance have done very well. In fact, figures from Moneyfacts published this week show ethical funds have done better than non-ethical funds in the past year.

Are you sure?

Absolutely. In fact the average ethical fund posted gains of 24 per cent in the last 12 months, compared with just 18 per cent growth from the average non-ethical fund. They have also outperformed UK Index Trackers (up 23 per cent) and the FTSE 100 (18 per cent).

Well that's surely an anomaly?

Not really. Over three years it's a similar tale. with ethical fund returns also edging ahead of non-ethical funds, by posting growth of 36 per cent compared with 31 per cent.

Why has it happened?

Ethical funds have benefited by avoiding sectors such as mining, oil and gas and tobacco, which have been among the poorer-performing areas over the last year.

So it's time to go green?

It's certainly worth considering, isn't it? After all, who doesn't want to make profits while saving the planet?