Ethical investment not as risky as charities think, says CAF

The Charities Aid Foundation is launching a free ethical investment guide for charities to dispel myths about the performance and risk associated with ethical funds.

Published in partnership with F&C Asset Management, the guide is written in a non-technical way accessible to novices as well as experienced charity finance directors.

CAF’s head of sales and marketing for charity financial services, Mark Morford, said it was not true that the narrower range of stocks fund managers have to choose from automatically increased risk and lowered the performance of ethical funds.

“It depends on the fund manager, but if ethical funds are run well they can prove just as effective as any other fund,” he said.

The guide also discusses the types of funds available and the criteria they work to. One example is the difference between “dark green” funds, which exclude investment in certain industries outright, and “light-green” funds, which limit investment to companies which try to minimise the negative impact of their activities.

Morford said there was also a case for charities to buy large stakeholdings in companies whose activities they disapprove of and exercise their voting rights to change those practices from within. “Obviously the smaller the company is the easier it is to do that,” he said.

Ethical investments have grown exponentially over the past decade, from just under £1.2 billion in 1997 to more than £5 billion in the first quarter of this year.

To request a copy of Invest today for a better tomorrow: a guide to ethical investing for charities, go to http://www.cafonline.org/ethicalguide or call 08702 643 296.

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