ethical fund

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Ethical fund

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.

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.
References in periodicals archive ?
Evidence on the performance of ethical mutual funds is mostly limited to the US and UK markets.
Bauer, Rob, Keen Koedijk, and Roger Otter (2002) International Evidence on Ethical Mutual Fund Performance and Investment Style.
34) These products include green mortgages, ethical mutual funds, and pollution damage liability insurance.
These institutions range from specialist ethical mutual funds to large pension plans.
However, fiduciary obligations require that ethical mutual funds invest according to what they preach.
A number have established ethical mutual funds, such as the Ethical Growth Fund founded in 1986 by Vancouver City Savings Credit Union.
Although Canadian regulation of the mutual fund industry, as in other jurisdictions, does hot distinguish between ethical mutual funds and traditional mutual funds, some commentators have suggested that investment regulation should make a distinction because the unique investment agenda of ethical funds gives rise to specific expectations from investors.
188) Consequently, Canadian ethical mutual funds may not be adequately applying their stake in corporations to improve the environmental performance of investments.
She chalks this up to the limited choice of ethical mutual funds in Canada.
There has been a lag in ethical mutual fund choices in Canada, but I'm sure we'll catch up eventually.
At the interview Jacob mentioned that he had been studying ethical mutual funds in the USA.
The Ethical Mutual Fund Performance Debate: New Evidence from Canada.