Half a dozen new products were launched last year in Spain. For investors keen to go the private equity route, some venture capital houses also select their investments along ethically correct guidelines. In May, the U.K.'s Scottish Equitable launched Britain's first ethical corporate bond fund, for investors seeking income rather than growth. Still, even given the good run this approach has had of late, this is not an area where investors should go it alone, particularly because they may find it hard to get information. But if you decide you want to take an ethical approach in at least part of your portfolio, take a close look at how the fund you select chooses its investments.
Funds tend to fall into two distinct camps.
Such news could come as a shock to those investors who believe they have invested ethically, only to find they own stock in companies with poor human rights or environmental records. And critics of engagement funds argue that the funds they have under management are simply too small to force large corporations to change their behavior. Avoiding investing in nasty companies does not make them change. Such diversification will allow for the pursuit of altruistic aims without causing unnecessary worry in turbulent markets.