''Tax-free profit, no harm done . . . Profit with principles.'' The first hot line, or rather ''blue line'', to an ethical investment is being heavily promoted by Friends Provident.

Friends, which is led by chief executive Peter Jones, above, launched the UK's first ethical fund, Stewardship, in 1984 and still has more than half the fast-growing #1700m sector. Now there's Stewardship International, enabling investors to get ''a very decent return, tax free, and without exploiting the earth's resources, human or otherwise''.

It is a Pep-able medium risk fund with a minimum #1000 investment. It replaces the North American Stewardship Trust and is invested 50% in the UK, 22% each in Europe and North America, 3% in Australasia.

Ethical funds held their own in performance terms until the big company boom of the last two years. The #468m Stewardship, for instance, has seen its three-year record pegged to 87.5% growth, compared with 105.8% for the average UK growth and income unit trust.

However the #75m Steward-ship Income has performed very badly, returning 57.2%.

George Spiers, at the Ethical Investment Cooperative of independent financial advisers, says Friends has a strong record and international diversification is a plus. ''In a lot of cases people make a moral choice as well as a financial choice.''

But Mark Dear, at ethical investment specialist adviser Holden Meehan in London, says Friends is not cheap (5.75% initial charge and 1.38% annual) while the even newer Standard Life ethical unit trust (3% and 0.95%) has a manager with a good small company record and a clean sheet with ''no deadwood holdings''. He is recommending Standard's Pep to new ethical investors.

RATING **

*** Worth considering

** Shop around

* Hype alert