(Universiti Kebangsaan Malaysia)
This paper discusses the development of ethical funds and the Islamic funds in Malaysia and evaluates how the investment criteria of ethical funds coincide with the investment perspective of the Islamic fund or vice versa. This study selected two ethical funds and analysed the investment criteria of both funds to determine the similarities and differences between ethical and Islamic funds. Data were collected from the fund manager master prospectus and annual report in various years. The findings suggest that an ethical fund cannot be regarded as an Islamic fund but an Islamic fund can be considered as an ethical fund .