F&C Stewardship Income and F&C Stewardship Growth funds have been enjoying a strong performance of late relative to the FTSE All-Share Index, with one analyst suggesting overall market volatility is partly responsible for an interest in ethical investment fund options.

The F&C fund which has a strong ethical bent, pushed performance ahead over the last year, again showing that ethical investment funds can be strong players in the current market, with so much market uncertainty over ethical and especially environmental factors, which can have a devastating impact on company performance.

Ethical Fund Manager, Catherine Stanley, says: “The BP crisis has highlighted the concerns of ethical investors around resource stocks and having no position has of course been a significant positive contributor to performance.”

Performance has been strong for the F&C funds despite the funds not being able to hold tobacco, beverages and pharmaceutical stocks, traditionally seen as safe havens during weaker market conditions. This is due to good performance from a number of small and mid-cap stocks, towards which stewardship has a natural bias due to greater ethical compatibility in these areas.

Ethical Fund Manager, Catherine Stanley, says investors have to be cautious though: ”I will continue to seek out opportunities in areas where structural growth can be found; however, there are increasing uncertainties around the impact of reducing Government spend and its effect on the domestic economy.”

With the markets uncertain recently – the financial crisis in Greece, fears of domino effects across Europe and the new UK Government rolling out its austerity plan, there may be signs that investors are looking to the long-term security of environmentally and ethically aware investments.