(MONEY Magazine) – Ethical investing, chortled at by free-marketeers and efficient market maestros who argue it's like boxing with one hand tied behind your back, has turned out to be a real contender. Newsletters, personal advisers, development banks and even credit cards are now offering investors positive ways of supporting causes both liberal and conservative. The classic ethical investment, the social-issue-type mutual funds such as Pax World (603-431-8022), up 25% in the past year, or Calvert Social Investment (800-368-2748), up 33%, now stand shoulder to shoulder with their less idealistic peers. Theoretically, these funds shouldn't be doing so well. Says Roy Weitz, executive director of the American Association of Personal Financial Planners: ''When you impose a nonfinancial screen on an investment, you limit your opportunity for diversification.'' Sensible or not, ethical investing seems to have hit a nerve -- or a scruple. Fidelity Select's American Gold Portfolio began as a direct response to client requests for a South Africa-free gold fund. It is up 1.4% in its first six months. The Clean Yield, a newsletter from Greensboro Bend, Vt. (802-533-7178; $75 a year), screens companies for environmental practices, weapons production and other criteria. Its model portfolio of stocks, according to its own unaudited tracking, is up 81% over the past 14 months. The McAlvany Intelligence Advisor in Denver (800-525-9556; $95 a year), a conservative newsletter, does not offer a model portfolio, but its investment advice and coverage of business and political trends may be helpful to conservative investors. South Shore Bank of Chicago offers what's called a Rehab CD. Your funds become linked to a loan program designed to keep rents affordable for lower- income families. Rates are competitive with those of regular CDs. To be a card-carrying ethical investor, you might try the Working Assets Visa card issued by State Street Bank of Boston (800-543-8800). Every time the card is used, a nickel goes to such organizations as Oxfam or the Sierra Club. The card costs $22 and carries an annual rate of 17 1/2%.