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Rogar
1-1-12, 10:25am
Many years ago I owned a socially responsible fund in the Calvert family of funds. It didn't do as well as my regular funds by a couple of percentages a year and I finally sold it and forgot about it. A recent discussion with a friend sparked some renewed interest and I did some brief searches. There are a lot more options these days, some doing sort of well and some not. Some have pretty high management fees. It looked like it could be a task sorting through all of them.

I was wondering if any of you have looked at or bought socially responsible funds and if you have any opinions? I've been pretty much a buy and hold index fund investor, but would like to look outside of that box.

ApatheticNoMore
1-1-12, 4:19pm
When I looked at "socially responsible" funds, they mostly seemed to be sector funds really.

This seems to be the consensus on what a socially responsible fund is:
"To qualify as a socially responsible fund, investments must meet certain criteria. Generally, SRI funds steer clear of companies that aren't environmentally friendly, are involved in nuclear technology, sell weapons, tobacco or liquor products or promote gambling"

From what I have seen: they don't invest in heavy manufacturing and so on because such industries are polluting (they often are very much so). So what do they invest in? Lots of financials (banks and so on), pharmaceuticals, etc.. That's why I say it's a sector fund.

I was also unimpressed that what they were investing in really was socially responsible by how I would define it. Yes, maybe by some criteria it could be argued that Goldman Sachs is more socially responsible than Anheiser Busch .... and by some criteria of course the reverse could be argued (ask OWS) ... and me, I'm really having trouble caring about this distinction. In theory I like not funding weapons manufactures (provided we are targeting the real targets here, I'm less concerned about some pistol manufacturer than Northrup Grumnan!) In theory I like things like avoiding companies that harm the environment (but if in practice this just leads to no manufacturing in your portfolio. Well ... in the real world manufacturing is going to continue regardless. And I'm not making a "what difference can one person make" argument here, rather I'm making the argument: a world without any manufacturing isn't even feasible or desirable in theory).

I think possibly some alternative energy funds rather than socially responsible funds as such, might truly be funding worthy companies. On the other hand are you even really funding a company except if you buy new share issues?

I understand the impetus behind thinking about socially responsible funds and it is admirable, OTOH most of the funds seems such poor choices in terms of really achieving anything socially beneficial that ... really better to give some money to charity. Concerned about the environment? Give to an environmental organization. Etc. Perhaps a few better funds exist now, but I still think they aren't the norm.

Rogar
1-1-12, 5:04pm
Interesting thoughts. Thank you. I suppose the reduction of diversity depends on the screening process. Some of the popular Calvert funds have a few of the big pharmaceuticals, information technology such as Apple, health care, financials, Coca-Cola,and even Johnson and Johnson. So are not horribly narrow. But do seem light in industrial manufacturing and I'm assuming do not include giants like Halliburton or Phillip Morris.

lhamo
1-1-12, 5:48pm
I had a small amount of money in Domini Funds for awhile, but eventually pulled it out -- was not satisfied with performance/high fees AND as I looked more closely at what they really held, realized the same things Apathetic No More pointed out above.

If I were back in the US I would probably try to put more of our money into locally focused investing. I am interested in some of the approaches bae takes, for example -- hope he will pitch in on this thread, as his experience might offer many food for thought.

lhamo