So you're interested in socially responsible investing
(SRI). Good for you! Once you learn about companies involved
in unpleasant activities even to a small degree, it can be
hard to stomach investing in them. Of course, people have
different thresholds and standards, too: You might not want
to be anywhere near supporting
genocidein Darfur, while not being so bothered about
investing in
Wal-Mart (NYSE: WMT), a company sometimes
accused of not being generous enough with its employees.
One way to ease your conscience is to invest in mutual
funds that screen out objectionable investments. Here are
five major fund companies in the SRI mutual fund arena:
Stocks that pass the test
To give you an idea of how these kinds of funds choose
the stocks they invest in, here's how the Appleseed folks
describe their approach in the fund's prospectus:
"The adviser believes that socially responsible companies
present less business risk for investors and create
opportunities to contribute to a more sustainable society.
The Fund will not invest in companies that derive substantial
revenues from the tobacco, alcohol, pornography, gambling or
weapons industries, as determined by the adviser. The Fund
will also consider a company's performance with respect to
environmental responsibility, labor standards, and human
rights."
Domini explains that it holds its investments to high
standards and believes that companies will enjoy long-term
prosperity if they do the following:
For example
Here are some of the funds from the families above that
you might want to look into (I'll include information on
Vanguard's S&P 500 index fund (VFINX) for
comparison):
Fund
Expense Ratio
Turnover
5-Year Return
10-Year Return
Top Holdings Include
Appleseed (APPLX)
0.9%
128%
Too new
Too new
Pfizer (NYSE: PFE),
Coca-Cola (NYSE: KO)
Calvert Social Index
AÂ (CSXAX)
Â
0.75%*
14%
(0.3%)
Too new
AT&T (NYSE: T),
IBM
Pax World Growth (PXWGX)
Â
1.46%
51%
1.3%
(1.1%)
Qualcomm (Nasdaq: QCOM),
Cisco (Nasdaq: CSCO)
Domini Social Equity (DSEFX)
1.15%
9%
0.3% Continued... |