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‘Ethical investors are burying their heads over oil and China’

Ethical investors are burying their heads in the sand when it comes to investing in oil and China, says Ecclesiastical Insurance Group.

Manager of the firm’s 50m ethically screened Amity fund Sue Round says it will take a decision on whether to inv- est in oil by the first quarter of 2006 and the firm is also keen to open up the debate on whether to invest in China, having taken stakes in two Chinese stocks.

Round believes that many ethical funds have suffered poor performance in the last year because they have avoi-ded oil and mining stocks.

She argues that investing in firms such as Shell and BP could not only provide ethical investors with enhan- ced returns but contribute to the research efforts of these companies into alternative energy sources.

The Amity fund screens individual stocks against investing in oppressive reg-imes but has taken a stake in Linmark and China Shineway on the basis that the two firms are making a positive contribution to democracy in the country through raising fac- tory standards and the provision of cheap drugs.

Amity Investment analyst Ketan Patel says: “There are many shades of green in ethical investing. Ethical investors have traditionally steered clear of certain sectors but they are burying their heads in the sand. Oil is a key ing-redient in the making of thousands of everyday products and China can no longer be ignored.”

Gaiea partnership IFA Olivia Bowen says: “I do not think that ethical investors are burying their heads in the sand – there is a lot of positive interest around.

“Many of our clients will accept oil investments if companies are promoting renewable energy and are trusting us to make decisions on China on their behalf.”

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