Norwich Union 'Green' ISA Review

Posted: 06 May 2008 by Harriet Meyer

Norwich Union's range of six Sustainable Future Funds and one Ethical Fund is one of the most comprehensive in the marketplace. And you can choose to pop any in a 'green' ISA portfolio to polish your eco-conscious halo.

The Future Funds are considered mid-green in their investment approach, choosing stocks across an array of companies which rank as 'best of breed' in sectors such as education and the environment. They look to actively invest in companies that make a direct link between sustainable development and long-term returns.

The UK Ethical fund is for the deeper green investors, who are searching for a fund that actively excludes companies involved in animal testing, for example, as well as those deriving profits from alcohol. It has one of the more stringent screening processes in the peer group.

So, by picking this ISA you have access to a broad range of 'green' funds, which are managed by the Morley Sustainable Future team -- one of the most experienced sustainable and responsible investment teams in Europe.

A big theme in the portfolio at present is stocks that benefit from the world's responses to climate change. The investment philosophy is simple: companies which are more sustainable and progressive -- environmentally and socially -- are better placed to grow and deliver above-average returns to investors.

Investors may be baffled, however, by the array of funds on offer -- funds they can't access without consulting an independent financial advisor (IFA) since they can't be invested in directly through Norwich Union. This may deter some seeking a home for their cash.

But the performance of the UK Ethical Fund, for one, relative to the others in its peer group, is appealing. If you put £1,000 into it three years ago, it would now be worth £1,286; or £1,897 if you invested five years ago. This compares to an average ethical fund, which would have returned £1,224 or £1,694 over the respective time periods.

Typically, the funds have an initial charge of between four and five per cent, with annual charges varying between 1.03 and 1.58 per cent. Whether they're competitive depends on which fund you pick. As a starting point, consult the Norwich Union website for a useful Q&A on the 'green' ISA funds. Unfortunately this falls short by failing to provide easily accessible performance figures, so check out Trustnet.com for more useful information.