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Why investing in 'good' funds could ruin your returns

Ethical Investment Week is upon us, but what are so-called-ethical funds - and are they really a wise investment?
Why investing in 'good' funds could ruin your returns

Would you risk investment returns on your hard-earned cash to make a small positive difference to the world of businesses? If not, you should steer clear of 'ethical' funds, advisers are warning.

What does ethical investing even mean? You may as well ask "how long is a piece of string?". Everyone's concept of 'ethical' is different; there are hundreds of ways to invest, making it difficult to decipher just how good these 'ethical' funds really are.

You might be surprised to learn that the majority of ethical funds invest in major banks, as well as oil companies. These are the businesses that have earned a distinctly 'immoral' reputation in recent years, having had devastating global-scale consequences as a result of their failings. But ethical fund managers say they are there to try to improve their management, rather than shun them altogether.

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