Socially Responsible Investing- Funds and ETFs

I haven’t written about socially responsible investing in a while so I thought I’d link to two recent articles that I read:

First is this article written by David Kathman on Morningstar about socially responsible investing, (SRI) funds. This column does a really good job of summarizing the broad landscape of SRI funds.

Most secular SRI funds avoid alcohol, tobacco, and gambling stocks, but beyond that they vary quite a bit in the criteria they use, just as the religious funds do. That can be both good and bad. On one hand, there are lots of choices for SRI investors, but on the other hand, it’s hard for beginners to sort through all the options.

He follows by discussing several SRI focused fund shops and goes into detail on Calvert, Pax, and Walden. He also discusses social funds of more popular money management firms such as Vanguard FTSE Social Index, TIAA-CREF Social Choice Equity, and iShares KLD Select Social Index. Actively managed funds that are mentioned are Dreyfus Premier Third Century, Neuberger Berman Socially Responsible, and Legg Mason Partners Socially Aware.

The article is really in-depth and is probably the best summary I’ve seen on SRI mutual funds. If you have a sincere interest in SRI, you’ll benefit from reading the article and heading over to Social Funds to check out the resources there.

The second article I’m passing along focuses on socially responsible ETFs, or exchange traded funds, which are “open ended mutual funds that can be traded at any time throughout the course of the day” (via Wikipedia). This article is a nice addendum to the Kathman article.

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