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Author: scdII Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2247  
Subject: SR funds do as well or better than non-SR funds Date: 11/12/2000 11:31 AM
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Since we seem to have gotten away from the subject of Divestment vs. Boycotts, I thought I'd start a new thread.

The rail by "IGotRich" against socially responsible funds and, to a lesser extent, Dave's response both seem predicated on the assumption that investors in SR mutual funds have to choose between smaller returns and the social/psychological benefits they desire. Au Contraire! This excerpt from a recent Morningstar.com article (http://news.morningstar.com/news/MS/Commentary/990917com.html) brings glad tidings for all:

"Socially responsible investing (SRI) has always had to fight the perception that it may be better for your
soul than for your bottom line.... Two years ago, when we took a look at the universe of socially conscious mutual funds, not a single SRI fund merited a 5-star rating.

A lot can change in two years. Today, 21% of the SRI funds in our database that have the necessary three-year record sport a 5-star rating. That's twice the rate of the overall fund universe. Moreover, only 19% of SRI funds find themselves in 2-star or 1-star territory, while a third of the overall fund universe rates that low.

SRI funds stack up even better when they are compared to their specific Morningstar categories. One quarter of these funds currently sport a top category rating of 5, and half have category ratings of 4 or 5.... That doesn't mean social screens add value, but it's hard to make the case that they subtract it.
"

Echoing what Dave pointed out about the non-monetary value of SRInvesting, I would argue that it's hard to make a case that these top-rated SR funds don't add greater overall value than their less responsible counterparts.

Now check out this bit from TheStreet.com (which is not normally a bastion of social responsibility):
"Despite their do-gooder tendencies, socially responsible mutual funds have performed pretty well as a category. Overall, they are up 21.56% in the last 12 months, beating the S&P 500, but well below the 55% increase in the Nasdaq. However, within the category, environmentally conscious funds have done very well. The leader over the last year in the socially responsible category is the Green Century Balanced fund, which focuses on environmental companies. It is up 110.77% for the last 12 months. Second-best is the Citizens Emerging Growth fund, which is up 108%."
(you can read the whole article -- which I highly recommend -- at http://www.thestreet.com/funds/davidkurapka/924858.html)

So Fool On, SRInvestors!
Susan
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