Socially Responsible Investing 101
It is quite possible to place our investments into funds that match our values, or what is better known as Socially Responsible Investing or SRI.
According to the Social Investment Forum, SRI integrates environmental, social and governance factors into investment decisions and recognizes that corporate responsibility and societal concerns are valid parts of investment decisions.
According to the Forum website above, you may also hear SRI-like approaches to investing referred to as mission investing, responsible investing, double or triple bottom line investing, ethical investing, sustainable investing, or green investing.
Today SRI encompasses an estimated $2.71 trillion out of $25.1 trillion in the U.S. investment marketplace. As of 2007, there were 260 socially screened mutual fund products in the US, with assets of $201.8 billion.
Socially responsible investors include individuals and also institutions, such as corporations, universities, hospitals, foundations, insurance companies, public and private pension funds, nonprofit organizations, and religious institutions. Institutional investors represent the largest and fastest growing segment of the SRI world.
You can get started in investing with SRI funds by choosing socially responsible mutual funds based on this performance chart. Calvert Investments, for example, offers a multitude of mutual and variable insurance trusts. Calvert has one of the largest teams of social research analysts in the US with a broad range of more than 40 equity, bond, cash, and asset allocation strategies for building diversified portfolios.
How do SRI funds perform in comparison to other mutual funds? Bottom lines are just as important. Studies show SRI mutual funds perform competitively with non-SRI funds over time. The longest-running SRI index, the Domini 400, was started in 1990. Since that time, it has continued to perform competitively — the S&P 500 with 10.33% total returns, versus the 10.83% return of the Domini 400.
For some basics on how to get started with investing, visit this Motley Fool article. To find a financial advisor you can work with, sort through company ratings at JDPower’s investment page.
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