The Investment Management Association’s (IMA) latest investment statistics show a 20% increase in the amount invested in ethical retail funds in the year to November 2013. This is higher than the 16.4% rise in assets across conventional funds.
Daniel Godfrey, IMA chief executive, said the statistical release, which includes all of its authorised investment funds, shows “a continuation of strong investment fund sales”. The top five best-selling IMA sectors indicate that investors are favouring equity and mixed asset funds.
The IMA data shows that in November 2012, £7.417 billion was invested in ethical funds. This grew to £8.887 billion by November 2013. The figures represent a £1.47 billion increase, or around 20%. Ethical funds now account for 1.2% of the industry and are gradually rising as sustainable investment becomes more mainstream.
The IMA figures differ to that of responsible investment research firm EIRIS. Its data showed the amount of money invested in the UK’s green and ethical retail funds to be at an all-time high of £12.2 billion in October 2013 – an increase of around £1.2 billion compared to 2012.
Around 80 funds feature in EIRIS’s 2012 and 2013 studies, which included some investment trusts and pension funds that are active in the retail market. This accounts for the difference to the IMA figures.
Similarly, the 133 investment funds from Blue & Green Investor were worth over £22 billion as of October 2013, a significant increase on the IMA figures. The vast difference is because not all funds on the site are domiciled in the UK. The platform also includes investment trusts and exchange traded funds.
Whilst the three data sets vary, depending on which funds were included, they all show a clear trend of increasing awareness about responsible investment. Surveys conducted for National Ethical Investment Week 2013 found that almost two-thirds of UK investors want to be offered sustainable investment options. However, 70% of investors don’t know if their investments meet their personal ethical preferences.
The research suggests that sustainable investment will continue to grow through 2014 as investors seek to align their portfolios with their personal values and to take into account a range of environmental, social and governance (ESG) factors.