Green ISAs: NEIW reveals top fund supermarkets

Smile and Fair Investment Company top the tree in a new mystery shopping exercise to identify the best fund supermarkets for green and ethical stocks and shares ISAs.

In the National Ethical Investment Week (NEIW) Five Star Ratings, Hargreaves Lansdown and Interactive Investor are awarded four star ratings. While Barclays Stockbrokers and Fidelity FundsNetwork are awarded three star ratings alongside the other eight fund supermarkets surveyed.

The research is published as recent IMA figures show that in December 2009 just under a fifth (18%) of all money invested in funds via an ISA was direct from the public via fund supermarkets and discount brokers. And research from NEIW found that the older generation, who have a higher ISA allowance in the current tax year, have a greener outlook than those in the 18-24 age groups.

The four and five star rated fund supermarkets and discount brokers stand out as they make it easier for investors to identify green and ethical funds, providing resources that help investors understand the options available to them. For example, they provide up to date guides that explain the range of options and/or offer a filter tool that helps investors identify relevant funds. Investors can now choose funds that will make a positive impact, such as those that focus on cleaner energy and health.

Penny Shepherd MBE, chief executive of UKSIF, the sustainable investment and finance association that coordinates NEIW, said: "With savvy investors now going direct to secure their ISA allowance, fund supermarkets are waking up to the growing interest in green and ethical investments. The high rating for a number of fund supermarkets highlights the high quality information and guidance available to investors who want to make money and make a difference. Similarly the range of green and ethical funds is on the increase.

"Many discount brokers are taking the additional step of providing resources that help investors better understand and identify funds that suit their individual needs. These fund supermarkets and discount brokers are well positioned to benefit from the current increase in ISA allowances for silver savers and the growing demand for green and ethical investing."

Penny added: "Green and ethical investing has changed a lot since its early days. Today, the options include climate change funds, environmental markets funds and broader sustainability themed funds as well as the more traditional negatively screened choices, which often exclude industries such as tobacco, nuclear power and defence."