Is it possible to invest ethically?

While you may welcome the chance to invest ethically, not all 'ethical' funds are as ethical as they would have you believe. Tim Bennett reports.

Ethical investing is big. According to a recent report from FairPensions, half of us would like our fund managers to take environmental and ethical issues into account. The size of the market for such funds has trebled in just ten years. But before you join the rush, there are two questions to ask: is ethical investing actually possible and does it work? The evidence is patchy on both scores.

The basic principle is simple, and seems sound enough. Ethical funds claim to invest your money only in firms that are screened for ethical soundness. So, out go sectors such as tobacco, alcohol and anything to do with gambling the so-called vice sectors.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.