Audit helps take stock: Best and worst - Selective investments
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Your support makes all the difference.ETHICAL and environmental funds are back in the spotlight but not necessarily for their investment prowess.
Nelson Mandela, the leader of the African National Congress, is calling for foreign investment in South Africa, a move that could eventually force a significant change of strategy from ethical funds.
This week, the Christian Ethical Investment Group, an organisation that promotes ethical investment policies in the Church of England, will publish suggestions for an 'ethical audit' that investors can use to screen investments.
There are 20 ethical or green unit trusts on the market, although only 19 are included in the table as the Co-operative Bank launched its new fund only a few weeks ago. The table also excludes the Target Life Global Opportunities Fund, which is to be merged next Friday with the Edinburgh Fund Managers International Fund.
Each of the 19 funds has different investment criteria, so comparing the progress of their unit prices only tells part of their performance story. Another way to look at them is by comparing their records against conventional funds. Only seven of the 19 in the table made more money during the 12 months to the beginning of October than the average in their sector.
Eagle Star's fund and TSB's are UK specialists and say this inevitably means their performance will have been worse over the past year than a fund such as Clerical Medical Evergreen that invests more widely. This fund has done well with stocks such as the Italian natural gas company Italgas and a Malaysian company called George Kent, which makes water meters.
However, both companies say there are other reasons for the recent lacklustre performance of their funds. TSB has avoided investing in financial shares because its managers were unsure how to assess the environmental credentials of banks, insurers and property companies. It has now developed a questionnaire that looks at issues such as energy efficiency, land use and how bank lending policies affect the environment. Land Securities passed muster and has been added to the portfolio.
Eagle Star says that some time ago it decided to skew all its funds, including the environmental one, towards larger companies. In the past year these have been outpaced by smaller firms. Eagle Star is now reviewing the policy.
----------------------------------------------------------------- ETHICAL UNIT TRUSTS ----------------------------------------------------------------- The best pounds 1 Friends Provident Stewardship North American . . . . . . . .138.01 2 Clerical Medical Evergreen . . . . . . . . . . . . . . . . .134.85 3 Friends Provident Stewardship Income . . . . . . . . . . . .133.86 4 Credit Suisse Fellowship . . . . . . . . . . . . . . . . . .133.51 5 Acorn Ethical . . . . . . . . . . . . . . . . . . . . . . . 129.59 The worst 15 Scottish Equitable Ethical . . . . . . . . . . . . . . . . .121.72 16 CIS Environmental Unit Trust . . . . . . . . . . . . . . . .121.66 17 NM Conscience Fund . . . . . . . . . . . . . . . . . . . . .120.83 18 TSB Environmental Investor . . . . . . . . . . . . . . . . .117.98 19 Eagle Star Environmental Opportunities . . . . . . . . . . .114.90 ----------------------------------------------------------------- The table shows the change in the value of pounds 100 invested over one year to 1 October 1993, offer-to-bid, net income reinvested. ----------------------------------------------------------------- Source: Micropal -----------------------------------------------------------------
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