Friends Provident ethical investment Stewardship fund outperformed the majority of non-ethical funds, according to new figures.
F&C Asset Management highlighted data that placed the Stewardship Income Fund amongst the best performing UK equity income funds over five years.
Additionally of the dozen top performing funds, the Stewardship Income Fund was the least volatile.
Jason Hollands, head of communications at F&C, commented: "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.
"The reality is that many UK equity managers hold all the big stocks for no other reason than they are worried about their 'tracking error', i.e. the extent to which their performance might differ from the market," said Mr Hollands.
"Because Ted [Scott, manager of the Stewardship Fund] can't buy some of the FTSE giants he is forced to pay more attention to the smaller and medium sized stocks, which is often where the most interesting investment ideas are found.
"The message is simple: ethical investors can have their cake and eat it," he concluded.To look into ethical investment options, click here.
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