Ethical funds minimise long-term risk

Ethical investments are ideal for investors looking to minimise long-term risk, a financial expert has claimed.

Alyce Lomax, columnist at The Motley Fool, said socially responsible investments should be the first choice for investors taking a long-term view.

“Investors should focus on stocks whose stellar business practices will help them endure for decades to come,” Lomax said in her weekly Motley Fool column.

“The basic principles of socially responsible investing (SRI) can help you identify great companies that focus on doing the right thing — and reduce their long-term risks in the process.”

Lomax’s advice came after ethical investment research specialists Eiris reported a 400% rise in investments in UK-based ethical and green funds over the past decade.

In December 2009, the amount invested in ethical funds hit a record high of £9.5 billion, up from £2.4 billion in 1999.

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