LONDON (AFX) - The Co-operative Insurance Society said its 125 mln stg ethical fund has outperformed both the UK stock market and the majority of UK unit trusts in the last three years, despite avoiding sectors like oil where share prices have rocketed.
The CIS Sustainable Leaders Trust, formerly known as Environ, is a retail SRI screening fund which excludes the oil and gas, mining and tobacco sectors from its universe.
The fund operates a screening policy on sectors according to corporate governance, health and safety, climate change issues and ecology, but not to sectors perceived as ethical like healthcare.
According to the CIS, the fund returned 83.7 pct in the three years to April 30, compared to 75.4 pct returned by the average UK unit trust and 79.6 pct for the FTSE All-Share. The fund also performed better than both benchmarks over the previous 12 months.
The recent strong performance of funds that promote social responsibility and ethical investing will be instrumental to dispel the myth that they are financially unprofitable, according to spokesman Andy Hammerton.
CIS fund manager Mike Fox said: 'These results show that choosing to invest in a socially responsible and ethical way can actually improve investment returns. Healthcare, the environment and the requirement for companies to behave in a sustainable manner are issues that are growing in importance.'
'The outlook for socially responsible and ethical unit trusts is very positive,' he said.
As well as the stock-picking SRI fund, last year the CIS launched an ethical engagement policy which covers all its investments, both screened and non-screened, covering investments worth 20 bln stg.
Customers gave the CIS an 'overwhelming mandate' to engage with companies on their ethical agenda, according to Hammerton.
The CIS is part of the Co-operative Financial Services (CFS, which also includes The Co-operative Bank and Smile brand. By Cecilia Valente: 44-(0)207 422 4925; cecilia.valente@afxnews.com cv/jdc/ak COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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