Ethical funds performing well

Investors in ethical funds have been rewarded for having a social conscience. An AMP Henderson study of 14 ethical funds found that in the three years to September 2003 these funds outperformed the ASX 200 index. Ethical funds had a poor year in 2002 but in the year to September 30 the funds outperformed the ASX 200 by 2.3 per cent.

AMP attributed the outperformance partly to the fact that ethical funds are biased towards small caps and growth shares, which both performed well over this period. AMP also said these funds invest in companies that do not have the same exposure to the cost risks of being sued or lobbied, as is the case with tobacco and mining companies.