Unless you are a regular listener to Radio 4’s The Archers, you will have missed a recent storyline involving the right-on organic farmers Tony and Pat Archer.
Sadly it did not involve them dying painfully of swine fever. Rather the couple have flogged off their herd of organic cattle and now have a sizeable six-figure lump-sum to invest.
So they pop off to their local IFA Dan for advice. This couple – the most irritating whingers ever to prop up the bar at the Bull – wanted to consider ethical funds. Dan tried to talk them out of this idea to no avail.
But sadly for me maybe the gruesome twosome could be on to something. Figures from the Investment Management Association show that 9.5 per cent of funds under management are in ethical trusts, which looks like the highest level for 10years.
And a recent survey by Moneyfacts shows that in the past 12 months ethical funds have posted on average gains of 24 per cent compared with 18 per cent for non-ethical funds. In three years they are up 36 per cent, compared with 31 per cent for those with less right-on connections. However in the past 10 years the politically incorrect wins, up 128 per cent, over the right-on, up just 56 per cent.
The good returns are mainly down to the underperformance of oil, gas, mining and tobacco companies – anathema to ethical funds – rather I imagine from any stonkingly-good performance from the kinds of companies these funds invest in.
Given the current worries about fracking and the Fukushima fallout, going ethical seems quite sensible. But as Pat and Tony are seriously unlucky (son crushed to death under tractor/poisonous bugs in the farm’s ice cream/daughter’s boyfriend’s shotgun suicide – you get the idea) then it is bound to mark a turn in the tide for ethical funds. Sticking to the fags and fuel guzzlers might well turn out better than following this hapless pair’s lead.
Given the current worries about fracking and the Fukushima fall-out, going ethical seems quite sensible._______________________________________________________________________________
Fields of gold for farmers
While we are still on a rural theme, spare a thought for the poor farmers of the UK. Or maybe not so poor – at least those who own their land rather than rent it. A recent report from the Royal Institution of Chartered Surveyors showed that farmland values have more than trebled in less than 10 years, at £7440 an acre compared with £2400 in 2004.
And the rise is not just down to farmers wanting more land so they can grow more and gain from rising commodity prices but from investors including pension funds who see land as a ‘safe haven’.
The limited amount of land also has pushed up prices – as Mark Twain advised: “Buy land, they’re not making it anymore.” While few of us are going to buy a field and hope it will boost our pension it is probably no more doolally an idea than many investments that have been made in the past with a similar aim.
A final thought. Who would have thought that The Archers could inspire more useful investment and pension advice than you would get from its Radio 4 stablemate Money Box?
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Death knell for offshore banking
There is a species in danger of extinction in the British Isles. But it is unlikely you will devote much sympathy to the dying out of offshore banks.
In the past few weeks the Bank of Ireland has been the latest to announce it is closing down its offshore offshoot based in the Isle of Man. It follows similar decisions recently by Clydesdale, AIB and, more distantly, Yorkshire Building Society and Northern Rock to close down their subsidiaries in the Channel Islands or Isle of Man.
Add on amalgamations and branch closures – Co-op said last month it was closing its Guernsey branch – and this is a part of the financial services industry hurtling towards dodo status.
I know that the image of offshore banks may appear as murky as the fog that often strands travellers on these islands, but there are plenty of expatriates who rely on them for saving. Without a UK address, they cannot open accounts with onshore banks and some may not want to save with banks in their current place of residence.
The offshore banks have been killed off largely by the continuing difficult financial climate and possibly regulatory demands. There is only a handful still in the market and there is an almost unseemly rush to the door to follow the others heading out of the market.
I agree that expatriates are hardly a fashionable cause for concern, but I do feel for those who now have little or no choice where they can put their savings – thanks to matters far beyond their control.
Charlotte Beugge is a freelance journalist
