Ethical funds under management have grown by almost a third in the past year according to new figures from the Investment Management Assocation.
The vehicles now have a total of £5.6bn asset under management within 50 funds, compared to £4.26bn at the same time in 2006.
Ethical funds have traditionally had a reputation for being niche investments rather than strong performers, as they are restricted in terms of what sectors they can invest in, therefore missing good returns from strong market trends on a cyclical basis.
However, with public awareness on the rise they have began to make enroads in the market, braking through the £5bn barrier back in January of this year.
An ethical fund also topped the UK all-companies for the first time earlier this year when the £171m Co-operative Insurance Sustainable leaders fund, managed by Mike Fox, came first out of 293 funds on a 12-month basis.
BestInvest head of communications Justin Modray says: “The growth in ethical is down to greed more than being environmentally aware and will continue to perform upon that basis. If the FTSE100 performs ethical fund will find it difficult, it has’nt recently and as a result ethical funds have good track records.”
Meanwhile, assets under management in fund of funds reached £33bn at the end of June 2007, a £3bn increase on the previous quarter and an increase of 30 per cent from 12 months previous. Balanced funds took the large chunk of assets representing 69 per cent, followed by equities at 18 per cent.