Early Ethical Funds

Considering the impact of where and how money is invested had been on the minds of some institutional, church and charity investors since the industrial revolution. Yet it was only in the 1970’s that the option to invest in line with personal values started to emerge as a possibility for individual investors. Ethical investing and ethical investments were born.

Pax: The first ethical fund for individual investors

The first retail ethical fund, the Pax fund, was launched in the USA in 1971 by Methodists – who did not want to financially support the Vietnam War.

Stewardship: The first UK ethical funds

The Stewardship range was launched in 1984 by the former Quaker UK Life Office Friends Provident.

In brief, the funds’ approach was – and is:

  • to support companies that have a positive impact on society
  • to avoid companies that have a negative impact on society
  • to encourage companies to behave more ‘ethically’ or ‘responsibly’

The early ethical policies of the Stewardship ethical funds drew substantially on the religious and personal values of the Stewardship Committee of Reference members and their earliest investors.

For further information, see Early Stewardship.

Today this range of funds is supported by a substantial team of analysts and fund managers as well as a Committee of Reference. Assets under management total several billion pounds.

A growing industry

Since 1984 around 100 other ethical funds have launched in the UK, with a total market value in the region of £10 billion.  See industry timeline for more information.

From these early ethical funds has grown a diverse range of options and styles available both to individual and institutional investors.  Some of these options closely resemble these early funds, others are very different.

This includes:

  • Themed and positively screened funds that focus on investing in positive companies of benefit to people and the planet
  • Negatively screened ethical funds that offer investors the option to avoid certain business activities
  • Engagement solutions across hundreds of billions of pounds of assets – which are used to encourage more responsible business practices