ethical fund

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Ethical fund

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Ethical Fund

A mutual fund in which the asset managers make investment decisions based upon some ethical code. An ethical fund is marketed to investors who may have moral objections to certain investment vehicles or companies. For example, an individual may have a moral objection to smoking and may therefore buy shares in a mutual fund that refrains from investing in tobacco companies. Ethical funds may have positive or negative guidelines; that is, a fund's ethics may inform where it makes investments (e.g. in environmentally friendly companies) and where it does not (e.g. in arms manufacturers). See also: Green fund, Islamic finance.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

ethical fund

A mutual fund that limits investment alternatives to securities of firms meeting certain social standards. For example, an ethical fund might exclude securities of companies that are known to practice discrimination, that operate in certain countries, or that produce specific products (for example, those having to do with nuclear weapons or nuclear power plants). Ethical funds include the Dreyfus Third Century Fund, the New Alternatives Funds, and the Working Assets Fund, among others. See also social investing.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Across the pond, in the UK, it was another 13 years before the first ethical mutual fund was launched in London.
In the past decade or so, we have seen the expansion of the ethical mutual fund market, with fund managers attempting to provide ethical or socially responsible returns by abiding by guidelines of ethical screening, which are usually negative and sometimes positive.
Bauer, Rob, Keen Koedijk, and Roger Otter (2002) International Evidence on Ethical Mutual Fund Performance and Investment Style.
Evidence on the performance of ethical mutual funds is mostly limited to the US and UK markets.
As can be seen from the ethical investment statistics above, the majority of ethical financing in Canada occurs in the pension and ethical mutual fund sections.
"There has been a lag in ethical mutual fund choices in Canada, but I'm sure we'll catch up eventually." This lack of choice results in the creation of broad screens trying to cater to the values of a large and diverse group of people and has led most of Abbey's clients to screened stock portfolios.
There are just a handful of ethical mutual funds in this space and a Shariah-compliant stock index, the BSE TASIS Shariah 50.
More recently, Bauer, Derwall and Otten (2006) studied the performance of what the authors called "ethical mutual funds" in Canada against that of their conventional peers and found that performance differences were not statistically significant in their sample.
Ethical mutual funds, such as those offered by Meritas Financial or The Ethical Funds Company, are those that have been chosen in accordance with certain screens, or chosen for their "best practices" compared to their competitors.
The first by the Lipper Corporation shows ethical mutual funds, the US equivalent of unit trusts, rising by over 95 per cent over the five-year period up to December 1992, compared with an 80 per cent price rise for conventional funds.
At the interview Jacob mentioned that he had been studying ethical mutual funds in the USA.