Ethical Performance
inside intelligence for responsible business


Friends Provident has new fund up its sleeve

October 1999

Friends Provident is to launch a new ethical fund early next year.

A spokesman declined to specify what kind of investment vehicle will be created, but the mutual life assurance company – which reported a 33 per cent increase in premium income to £88 million in the first six months of 1999 – is known to have been considering launching the UK’s first with-profits ethical fund for some time.

With-profits funds, which guarantee yearly bonuses to fund members, have to date been a problematic area for ethical investment because they entail far greater exposure across the stock market.

Two other providers, NPI and Axa Sun Life are also believed to be in the race to become the first to offer such a product, which could make ethical investment attractive to a far wider audience.

The Ethical Investors Group, an independent financial adviser business, estimates that whoever develops the first with-profits ethical fund can expect up to £300 million of investment almost immediately.

Friends Provident said: ‘the idea of the new fund will be to give investors what they want to buy, as opposed to what we think they want to buy.

‘There are different sectors of the ethical consumer market and we want to make sure we have an offering for each of those sectors.’

Scottish Widows has put plans to launch an ethical fund on hold until its proposed merger with Lloyds TSB has been completed. A company spokesman said: ‘we won’t be doing anything major in the next few months, but if the takeover happens we will then review our portfolio’.

If approved, the merger is expected to be completed in the middle of next year.


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