Can you be a socially responsible investor and still get good returns on your investments? L.A. Times consumer columnist and guest host David Lazarus says yes. Here is some advice on how you can be a more socially responsible investor:
Where to get started
If you’re interested in socially responsible investing, you may want to start with SocialFunds.com, which bills itself as “the largest personal finance site devoted to socially responsible investing.” The website features over 10,000 pages of information on SRI mutual funds, community investments, corporate research, shareowner actions, and daily social investment news.
If you’re interested in connecting with others about social investing, try the Forum for Sustainable and Responsible Investment. Formerly known as the Social Investment Forum, the site is the “U.S. membership association for professionals, firms, institutions and organizations engaged in sustainable and responsible investing.”
The top funds for ethical investing recommended by Kiplinger’s
Parnassus Workplace — As of January 04, 2013, the fund says it has assets totaling almost $280.36 million invested in 36 different holdings. Its portfolio primarily consists of medium- to mega-cap domestic stocks. According to their Web site, “The fund invests principally in undervalued equity securities of large-capitalization companies with outstanding workplaces.”
Amana Income Fund — The Income Fund invests only in “common stocks, including foreign stocks. Investment decisions are made in accordance with Islamic principles.” The fund “diversifies its investments across industries and companies, and generally follows a value investment style. The Fund purchases only dividend-paying companies, which are expected to have more stable stock prices and tend to be larger companies.”
Portfolio 21— A pioneer in the field of social and environmental investing since 1982 that was designed “to address the ecological risks and opportunities of the investment process in the 21st century.” A low-turnover, multi-cap, core portfolio, the fund “invests in companies designing ecologically superior products, using renewable energy, and developing efficient production methods.”
Appleseed Fund — Launched in 2006, with the goal of “generating market-beating returns by making prudent, disciplined, and sustainable investments.” Appleseed says it “incorporates fundamental analysis, environmental and social screens, and community investing.”
TIAA-CREF Social Choice Equity — The fund is a “recognized leader in global socially responsible investing, ranking among the largest managers of comprehensively screened assets with approximately $12 billion in assets under management (as of Dec. 31, 2011).” The fund seeks a “favorable long-term rate of return that tracks the investment performance of the U.S. stock market while giving special consideration to certain social criteria.”
The largest socially responsible mutual funds, according to About
Ariel Fund— The Ariel Fund is part of the family of mutual funds managed by Ariel Capital Management. It is a small/mid cap value fund managed by John W. Rogers, Jr. since its inception in 1986, and invests primarily in the stocks of companies with market capitalizations between $1 billion and $7.5 billion.
Pax World Balanced Fund — Part of the Pax World Mutual Funds family. It “seeks to outperform a Blended Index by investing in stocks which the portfolio managers believe are reasonably priced and are well positioned for growth in sectors believed to be likely to grow faster than the overall growth rate of gross domestic product (GDP). “
PIMCO Total Return III Institutional — A fund for institutional investors like pension funds. “Seeks maximum total return, consistent with preservation of capital and prudent investment management.”
Ariel Appreciation — A mid cap value fund co-managed by John W. Rogers, Jr. and Tim Fidler with a track record dating back to 1989,. It invests primarily in companies with market capitalizations between $2 billion and $15 billion.
Parnassus Equity Income — The fund is a diversified, fundamental, U.S., large-cap, core equity fund. It seeks to invest “in good businesses with increasingly relevant products or services, sustainable competitive advantages, quality management teams and ethical business practices.”
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