It’s certainly the case that ethical and sustainable funds comprise a small proportion of the whole marketplace, but this marketplace is very big. There are around 220 funds monitored by 3D Investing which are registered for sale in the UK and have an ethical or sustainable mandate.
These cover a wide range of assets including equities, bonds, real estate and infrastructure. Likewise there is considerable geographic diversification with equity funds operating within the UK, Europe, Emerging Market and Global sectors. Furthermore, there is something for the income investor, with equity income funds, high yield bond funds and income orientated infrastructure funds.
When ethical funds were first launched in the UK over 30 years ago, the range was indeed very limited, with negatively screened equity funds. This is no longer true and we are seeing increasing levels of sophistication in the market with ETFs, multi-asset funds and currency hedged trusts. With this range of tools, it is quite possible to run balanced, multi-asset portfolios that meet the needs of the many investors.
Past performance is no guarantee of future performance, and investments can fall as well as rice.