The new ethical fund from National Mutual is a unit linked pension fund available for individual or group personal pensions.
It will invest wholly in the fellowship fund, which is managed by Credit Suisse Asset Management.
The fellowship fund operates with strict criteria. It will not invest in companies which produce alcoholic drinks, tobacco, restricted pesticides, weapons, pornographic material or genetically modified organisms, as well as those which have a poor pollution record or profit from gambling.
It will invest in companies that have a good environmental record, that are energy-efficient, do not use animals for experiments and are involved with the local community. Among the companies that it currently invests in are Vodaphone Airtouch, Smithkline Beecham, Britt Allcroft and Royal Bank of Scotland.
Ethical funds tend to appeal to the investor who cares about where their money is invested. However, because ethical funds have a narrower choice of companies to invest in, their performance can lag behind other funds which place profits before ethics.
According to Standard & Poors the Credit Suisse fellowship fund is ranked 94 out of 230 funds, based on £1,000 invested on a bid to bid basis with net income reinvested over a three year period to September 4, 2000.