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I read this interesting story in this month's SmartMoney magazine about the differences and secrets of Socially Responsible Mutual Funds. Many have different philosophies and approaches, and fund owners might be surprised if they dig into the prospectus to see what they really own:

Amid all the headlines about money fleeing stock funds, one category of funds has been doing just fine. The group known as socially responsible mutual funds pulled in more than $200 million in 2010, sending assets past $45 billion, as tough times led more people to search for ways to make their investments match their values. But behind the growth are a few surprises that are giving some investors pause: portfolios sprinkled with companies that don't fit their idea of socially responsible investing (or SRI), fund managers who seem more like bystanders than activist investors, and a sense that some funds just pay lip service to their ideals. [...]

Part of the problem is everyone has a different idea of what social responsibility means. Tobacco is out, but what about nuclear power? Is it responsible to own a polluter with the idea of encouraging it to go green, or is it best to avoid the company altogether? Some advocates of socially responsible funds say that while funds might have different answers to these questions, they need to be clear about their mission.
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