church ethics hit share returnsOctober 2002
Church of England equity investments underperformed the FTSE All Share Index last year due to a policy of excluding certain companies on ethical grounds, according to the Church’s investment advisers.
The C of E’s ethical investment advisory group has calculated that the Church’s return from FTSE All Share equity holdings fell by 14.2 per cent. But the fall would only have been 13.4 per cent if it had also invested in companies normally excluded from its portfolio, such as tobacco companies.
The advisory group says ‘strong performance in some of the Church’s excluded areas, such as tobacco and alcoholic beverages’ was the single biggest reason for the 0.8 per cent underperformance. It concludes: ‘The application of an ethical investment policy that excludes certain activities and market sectors has an impact on the financial performance of the Church’s funds’.
However, it warns the figures ‘can be no more than illustrative, as they presuppose that fund managers would have invested in all of the excluded companies throughout the period’.
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