Ethical Outperformance  

The SMH reports that the best performing fund managers are the ones invested in "soft commodities" (ie. agricultural products) and ethical funds (partly because they view coal seam gas as an ethical investment) - The best funds in a crisis.

What a shocking year it has been for investors. The global financial crisis has deepened, bringing with it fear and loathing. The easy annual double-digit gains of the preceding five years have been replaced by losses, some of them huge. No one is brave enough, or foolish enough, to predict where it will end. It is at times like this that fund managers are challenged to prove their worth. ...

The better-performing share funds have tended to be those that picked the rise of the soft-commodities cycle and avoided the financial-services companies. Rising food prices are being driven by demand from emerging economies and the increasing use of farm products in bio-fuel production. Yet, arable land is diminishing and demand is growing for products that can increase crop yields. ...

Australian Ethical Investment is the deepest-green manager in Australia. Its Ethical Trust has restricted losses for the year to 3 per cent.

It is a fund that invests in smaller capitalised Australian companies and has about 25 per cent of its money invested in overseas-listed stocks. The manager will not invest in about 85 per cent of the Australian sharemarket on ethical grounds. Although it will not invest in the traditional resources sector, it has been investing in explorers, producers and retailers of coal-seam gas companies, such as Origin Energy, Arrow Energy and Pure Energy Resources. The manager has backed the three stocks because coal-seam gas emits 50 per cent less carbon dioxide than coal-fired power generation.