More rich Brits is good news for environment

There are an increasingly large number of wealthy Britons, and they are placing greater emphasis on ethical investments than ever before.

That is according to a new report by market analysts Datamonitor, who investigated the number and attitude of the UK's "high net worth population".

The study reveals that last year the number of Brits with at least £200,000 in liquid assets (i.e. savings accounts, ordinary shares, unit trusts and bonds) grew by around 100,000 people, and that they are increasingly concerned about ethical investments.

"The issues of the environment and 'responsible investing? are rising up the political and financial agenda and play an increasingly important part in what many private individuals wish to do with their money," Datamonitor said.

And ethical concerns have moved beyond the 'avoid guns, cigarettes, and firms paying low wages' brief that the sector was once defined by, to include positive investments as well as avoiding negative ones, the Datamonitor report finds.

This, coupled with the growth in ethical investment, means these funds now control significant amounts of equity in key firms - making their ability to influence decisions internal to companies greater than ever.

Last year more than £10 billion was invested in ethical funds, 18 per cent up on the previous year's figures.

And an ethical investment need not sacrifice earnings potential.

F&C Asset Management points to data showing money invested ethically can produce returns at least equal to less scrupulous investments.

Its ethical Stewardship Income Fund has been one of the best performing UK equity income funds over five years, F&C points out.

Moreover, of the 12 consistently top performing funds, the Stewardship Income Fund was the least volatile.

"There is a widespread perception that if you invest in an ethical fund, which avoids certain types of companies, then it is somehow bound to cost something in terms of performance," said Jason Hollands, head of communications at F&C.

But this is not the case, as ethical funds are not governed by the same constraints on investments that many funds are.

"The message is simple: ethical investors can have their cake and eat it," he concluded.

The Investment Management Association (IMA) has produced a free fact sheet explaining how to invest in funds in line with your ethical principles that still produce healthy returns.

"The majority of investors seek long-term sustainable returns and this fact sheet explains how it?s possible to achieve this while also investing according to your ethical principles," said Mona Patel, IMA head of communications.

Ethical investment ? a guide to ethical and socially responsible investment funds is designed to help investors understand more about the screening behind ethical funds, as well as giving information on how to select a fund which matches your specific principles.

The full IMA guide (in PDF format) can be found here.