Investors can choose from a wide variety of socially responsible funds, writes Fiona Reddan

A WIDE selection of ethical, eco and socially responsible investing (SRI) funds are available to Irish retail investors.

For investors seeking exposure to major corporate names while avoiding companies that operate in sectors such as defence or tobacco, there are a number of funds based on negative screening on the market. However, investors need to be clear about what exactly the funds are screening out - and what they consider appropriate to include.

AIB's Select Ethical Balanced Growth Fund aims to "invest in the securities of corporations which do not carry out activities of common ethical concern".

Its investments include construction firm CRH, pharmaceutical firm Elan and financial institution Banco Santander.

James Leen, senior manager and head of product management with AIB Investment Managers, says the bank adopts a negative screening approach, whereby a universe of stocks is picked as part of a normal selection process, and then Eiris, an independent ethical research service, is consulted to select stocks for its ethical funds.

"We won't include companies which derive income from tobacco products, sales of weapons, gambling, pornography, or have a large presence in certain countries which have poor human rights records, or companies which have a significant detrimental effect on the environment," he says.

This autumn, the bank will launch the Global SRI Fund. In addition to negative screening, this fund will have a bias towards firms that have demonstrated socially responsible initiatives.

Bank of Ireland Asset Management has a dedicated ethical investment review committee to consider investments for its Ethical Managed Fund. It avoids investing in companies involved in the defence industry, animal testing for cosmetics, and environmental damage. The fund's top 10 holdings include banks AIB and Unicredito Italiano, as well as Vodafone and CRH.

Hibernian Investment Managers runs six ethical funds, including a European equity fund and a bond fund. Marketing and client services director Kevin O'Kelly says the funds' holdings are selected via negative screening as well as by identifying companies that contribute positively to the environment or society.

These include renewable energy suppliers or education and healthcare providers. The main holdings in its SRI European Equity Fund include financial firms Allianz, Axa and BNP Paribas.

For investors looking for a purer approach to ethical investment, several renewable energy funds are available.

Dolmen's Green Effects Fund includes renewable energy firms among its holdings, as well as companies offering recycling services.

Quinn Life recently launched the Clean Energy Freeway Fund, which aims to track the performance of the SP Global Clean Energy Index. The index invests in 30 of the largest and most liquid companies involved in clean energy production or the manufacture of equipment and technology for the clean energy industry. The minimum investment is a lump sum of €1,250 or €50 a month.

For retail investors, KBC offers the Innovator Fund, which is distributed through Bank of Ireland Life. With a minimum investment of €5,000, it focuses on alternative energy, water, emerging markets and commodities.