Do "socially responsible" mutual funds perform as well as mainstream mutual funds?

Question

From http://www.socialinvest.org/areas/sriguide/:

Socially Responsible Investing is integrating personal values and societal concerns with investment decisions is called Socially Responsible Investing (SRI). SRI considers both the investor's financial needs and an investment’s impact on society. With SRI, you can put your money to work to build a better tomorrow while earning competitive returns today. Social investors include individuals and institutions such as corporations, universities, hospitals, foundations, insurance companies, pension funds, nonprofit organizations, churches and synagogues.

Answer 1

Numerous studies have been done on the subject since 1970s. The conculsion in most cases is that performance of funds that practice SRI is not significantly different from performance of mainstream mutual funds. However, there appear to be consistent style tilts. One study finds that SRI equity funds tend to be large-cap growth funds, another, that SRI bond funds tend to be overexposed to BBB bonds and underexposed to AAA bonds.

Also, there are differences in definitions of "social responsibility". Domini 400 Social Index excludes companies that derive any revenues from the manufacture of alcohol or tobacco products, companies that derive any revenues from gambling products or services, electric utilities with interest in nuclear power plants, and companies that derive 2 percent or more of sales from military weapons systems. Calvert Index evaluates companies based on environmental impact, workplace, product safety, international operations, human rights, community relations, and indigenous peoples' rights. Catholic funds come in at least three flavors. The least restrictive ones only avoid stocks involved with the military, abortion, and contraception. Others add pornography, tobacco, and gambling to the list of restrictions. The most restrictive ones further limit the universe by investing only in companies that, in addition to all of the above, have positive ethical scores in community, environment, and diversity.

Answer 2

While great in pricipal and you can find socially responsible corporations, why not go ahead and invest in companies that cater to people's vices? Make a load of money on them and then when you, sell them and donate the money to a charity. As far as do "socially responsible" mutual funds perform as well as mainstream, look at the numbers. If they have similar returns and risk and all, then yes. If not, no.

Answer 3

Socially Responsible mutual funds are malarkey. The performance of all mutual funds depends solely on which
stocks the managers choose to invest in.

Answer 4

In principle, they shouldn't, because as you narrow the field of possible investment choices, you reduce your ability to select the top stocks.

However, in practice, some have performed just as well or better than other funds. To some extent, this will depend on management ability, as well as how narrowly one interprets the "socially responsible" mantle. There are many different interpretations of what it means to be socially responsible, so there's no blanket definition.

Answer 5

Mutual money are component to the previous. the expenses to circulate into, to go out, and to maintain take various the income. Over $1T have left mutual money and are not invested in ETF's. extra uncomplicated to alter ETF's and the expenses are so much less. by no potential purchase Mutual money with the aid of an entire provider broker provider.

Answer 6

ULIPs are more better than any mutual fund
because you can get free life insurance in this and tax saving + devidends like in mutual funds