Alternative sources of energy are needed from ethical managers

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With ethical funds unable to invest in some major FTSE stocks, fund managers do not have the comfort of simply hugging the index so good returns come from prudent stockpicking

Some ethical funds have produced market-beating returns even though many advisers still labour under the misconception that screened funds cost investors money. One of the many myths surrounding ethical and socially responsible funds is that they are compelled to underperform. Some investors and advisers assume that the funds will sacrifice returns because they shun companies whose activities they deprecate, and because they invest in a restricted universe of stocks. However those who make these assumptions risk missing out on significant returns from investments in sustainable companies a...