Aegon Ethical Equity Fund Class B - Accumulation (GBP)

Over two thirds of the UK's largest companies are excluded from the fund's investment universe on ethical grounds. The fund therefore has a long-term bias towards higher-risk small and medium-sized companies. Our analysis suggests this has helped the fund perform better than peers in the IA UK All Companies sector over the long term. It can cause more volatility though and past performance isn't a guide to the future.

Overall, Ryan has a solid track record and we think she will do a good job over the long term. That said, the fund's exclusions mean performance will differ from that of other funds in the sector. When the excluded areas are out of favour, we would expect the fund to perform well, although the reverse is also true.

The Aegon team look at the effects a company's activities can have on the environment and society and use a strict screening process to find suitable companies. Audrey Ryan then selects the ones with the best long-term prospects, taking into account her views on the UK economy.

This fund uses a 'negative screening' approach. That means it won't invest in any companies with significant involvement in any activities deemed unethical. From tobacco and alcohol producers to munitions manufacturers and companies that use animal testing.

Below is a more detailed list of the companies that the fund won't invest in.

Animal welfare - companies that provide animal testing services, make or sell animal-tested products, are involved in intensive farming, operate abattoirs or slaughterhouses or sell meat, poultry, fish or dairy

Military - companies that make armaments, nuclear weapons or similar strategic products

Nuclear power - companies that own or operate nuclear facilities

Environment - companies that excessively damage the environment, in breach of internationally recognised conventions on biodiversity or not tackling climate change

Political donations - companies that have made political donations of more than 1% of revenues in the last year

Genetic engineering - companies that have patented genes

Gambling - companies with investments in betting shops, casinos or amusement arcades which account for more than 10% of their total business

Alcohol - companies where more than 10% of their total business involves brewing, distillation or sale of alcohol

Tobacco - companies where more than 10% of their business involves growing, processing or selling tobacco

Pornography - companies that provide adult entertainment services

Debt - banks with exposure to large amounts of corporate or Third World debt

Oppressive regimes - companies operating in countries with poor human rights records or with no established policies on human rights issues