Choose life, choose a unit trust

Ethical investment trusts have never fought shy of controversy. Now one firm has taken a stand on the sensitive issue of abortion.

Ethical unit trusts have so far concentrated mainly on avoiding companies which recklessly pollute the environment or sell arms to Third World dictators.

Most of us can agree that these are undesirable activities, creating a cosy consensus for the managers of ethical funds. But now, a new ethical unit trust plans to take on the far more controversial area of abortion.

The CF Banner Real Life Trust, Britain's first "pro-life" investment fund, will refuse to buy shares in companies that contribute to the 180,000 abortions carried out in the UK each year. It will also avoid all the traditional areas of concern for ethical investors, such as armaments, tobacco companies or animal testing.

John Jones is a partner at Banner Financial Service, the independent financial advisers who have put the trust together. He says: "The main thing with our unit trust, which sets us apart from anyone else, is the pro-life issue. Companies which are in any way linked to organisations which have pro-abortion activities would be excluded."

The trust will apply this criteria strictly. If a company which is supplying surgical instruments gets even one per cent of its business from abortion clinics, for example, that will be enough to bar it from the trust. Banner Financial Services has already started marketing the fund to 50,000 members of the Christian Evangelical Alliance, and hopes to also promote it through the religious press.

Mr Jones hopes it will also be possible to promote the fund via direct mail to members of anti-abortion groups, such as Life and the Society for the Protection of Unborn Children. Groups like these, he says, have about 300,000 members in the UK.

But, on the other side, "pro-choice" campaigners feel just as strongly about the issue of abortion as their "pro-life" counterparts.

Jane Roe, of the Pro-Choice Alliance, says: "Most women considering an abortion see it as the responsible decision. They might feel that perhaps they haven't been terribly responsible getting pregnant in the first place, but that, at least now, they are doing the right thing.

"If you are looking at it from a Christian or a religious viewpoint, then you will see it differently. I just wish they'd have a little more compassion for the women who are going through the turmoil of having to decide about an abortion. I think it's very un-Christian to say that what they're doing is completely wrong."

In practice, most of the actual stocks barred by the Banner fund will be ones which any mainstream ethical trust would also refuse to buy. The pharmaceutical companies, which the banner fund would bar for involvement in abortion, for example, may well be barred from other ethical funds on the grounds of animal testing.

By far the UK's largest ethical fund is Friends Provident's pounds 900m Stewardship Fund. Its own policy is to buy pharmaceutical shares only if convinced the company involved may make a huge contribution to human well being. So far no pharmaceutical company has qualified.

Richard Singleton, assistant director for ethical funds at Friends Provident, says: "There are no pharmaceutical companies in the portfolio. In practice, the Stewardship Fund is extraordinarily close to a pro-life fund. I would be very surprised if there is a significant difference."

Asked about Banner's plans to promote its own fund as "pro-life", Mr Singleton says: "I see that more as being a public stance than anything that would materially affect the stock selection."

If Mr Singleton is right, then the Banner fund's pro-life label will amount to little more than a new way of selling a traditional ethical trust. Mr Jones says, however, that the main difference between his company's trust and others in the ethical sector is that Banner's managers will specifically check on the issue of abortion before investing.

He stresses that, although the trust will bar any company involved with the morning after pill - which it views as a form of abortion - it has no ethical problem with contraception used before or during sex. "That's a different issue altogether," he says.

The launch of a Banner's "pro-life" trust, managed by City Financial and Albert E Sharp, comes despite complaints against other financial institutions which have tried to tap into the same market.

Halifax Bank's independent financial advisers' operation got its fingers burnt when it became involved with anti-abortion campaigners three years ago.

Halifax Independent Financial Advisers Ltd (HIFAL) placed ads in a Life newsletter back in 1995. These offered to split the commission generated by readers buying financial products through HIFAL. Forty per cent of the commission would go to Life. But protests from existing Halifax customers led to the campaign being withdrawn after only a few months.

Celia Rowland, a spokeswoman for the Halifax, says: "This sort of issue can be quite sensitive and people will have strong feelings about it on both sides. Because very little business had come in, and because we had a handful of complaints, we took the commercial decision to cancel the agreement."

Jane Roe, of the Pro-Choice Alliance, says: "Halifax were actually losing some of their customers as a result, and they very quickly reversed the whole thing. They really did get egg on their face."