What Are SRI Funds? More from: mint.com 1. Is

New Post Public Reply Private Reply Replies (0) Message Board

Nov 21, 2012 at 2:44 AM

What Are SRI Funds? More from: mint.com 1. Is Facebook the IPO of a Generation? 2. 4 Tips to Avoid Becoming a Consumer Lost Cause 3. Things You Should Never Buy Used

You don't have to check your values at the door when investing in the market. An increasing number of investors are choosing to put their money to work in companies that not only have a profitable future, but also reflect their values, like those committed to environmental sustainability or ones that give back to the community. But this isn't charity, it is Socially or Sustainable and Responsible Investing (SRI), and investors still expect and seek a strong return on their money – just one that balances their values with their investment goals. The Rise of the SRI Fund The first SRI fund of its kind started in the early 1990s with very few assets. But at the end of 2010 there were over 250 SRI-focused funds for investors to choose from. Funds earmarked for SRI investments now make up around 12%, or $3 trillion, out of the $25.2 trillion invested in the market today, according to The Forum for Sustainable and Responsible Investment (US SIF), a trade group representing SRI funds. Inside the funds, which are managed by professional money managers, are a collection of companies and investments that comply with a certain SRI cause. They usually follow some sort of environmental, social or corporate governance theme, which are collectively known as ESG issues. Several of the large money managers offer several SRI products for their clients, ranging from simple passive index funds that track large or small SRI compliant companies, to actively managed funds that invest in companies focused on one of the three main ESG themes. Investors can also put their money in one of a number of exchange traded funds (ETFs) that track SRI compliant companies. What Does It Mean to Be "SRI Compliant?" The large funds may be a bit too broad for many investors, money managers screen and add or eliminate companies that normally do not comply with the general idea of what makes up an SRI company, but peoples' values aren't usually that simple. In general, money managers choose to avoid adding companies that deal in things that kill (defense & weapons, landmines & cluster munitions), things that are vices or sins (gambling, pornography, usury, tobacco and alcohol) and very controversial topics (abortion, contraceptives, animal testing, genetic engineering, stem cell research and nuclear power). They also avoid investing in companies that do business with, or are domiciled in, "rouge" nations like Iran, North Korea, Sudan, Myanmar (Burma), Cuba and Syria. The screening process varies by money many manger so be sure to find out what they are when choosing to invest in a SRI focused fund. One way to find out is to use this handy chart from US SIF. How SRI Funds Stack Up So how do these "feel-good" investments actually stack up with the broader market? Well it's hard to say, given how variegated the funds are based on their various themes, but as a group, they tend to track the S&P 500 index pretty well. There are more than 20 studies that show SRI funds perform basically on par with non-SRI funds. One can review the studies at www.sristudies.org, which is collection of all the major academic studies on SRI investing. But some SRI themes have been hard hit lately, especially those focusing on alternative energy. Weak natural gas prices and the reduction of government subsidies for alternative energy companies have obliterated funds that focus on wind, solar and geothermal energy start ups. For example, the Calvert Global Alternative Energy Fund A, which invests in wind and solar companies, was down 33% last year. You can review all SRI fund performance on the US SIF website.

Newer

Older

Scroll down for more posts ▼

Top 10 Most Recent News Articles

wagamama Spruces Up U.S. Market with mamago Launch

What's Cooking at wagamama with mamago? Here comes wagamama, striding into the American dining scene with that familiar bold Pan-Asian flair, now offering more than just a seat at their tables. The fresh move to a direct-to-door model dubbed ‘mamago’ ushers in an era where their signature dishes don't just seduce your taste buds at their restaurants. Nope, they are...

Modular Building Boom Shakes Up Asian Construction

Building the Future, One Module at a Time What's ticking in the world of construction? Modular buildings, my friends. They're generating buzz at the Fourth Linyi Mall International Buyers Conference held last week, and for good reasons. If you're not following, China is rolling out prefabricated houses like they're the next big thing since sliced bread, leaving buyers in...

BioMarin Strikes Deal for New Fabry Disease Therapy

BioMarin's Latest Moves in Rare Disease Therapies Now here's a plot twist in the biotechnology landscape. BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) just did what they do best—snagging rights to a promising enzyme therapy aimed at turning the tide for Fabry disease. In a deal that spoke volumes about their intentions, BioMarin is forking over a cool $70 million upfront...

Freddy's Partners with Convoy of Hope for Charity Drive

Freddy’s and Convoy of Hope: A Sweet Collaboration Plunging headfirst into charitable waters, Freddy's Frozen Custard & Steakburgers has announced a partnership with Convoy of Hope for a cause-centric month. From November 1 to December 1, Freddy's is urging patrons to chip in for the broader good. It’s simple – round up your in-store or drive-thru bill to the...

Stellar's New VP Aims to Bridge Space and Tech

Ain't every day you see a heavyweight like Rister stepping into a new role, especially when he's packing thirty years of experience in his tool belt. Bradley J. Rister, now the Vice President of Commercial Solutions Sector at Stellar Solutions, isn't just taking over a desk job. Nope, he's got a pivotal role in gearing up the company’s commercial tech for national...

CallRail's New Insight Tool: Navigating the Competitive Landscape

How CallRail's New Feature Changes the Game Ever sit in a boardroom meeting and wonder what your lead numbers really mean? CallRail just dropped a new feature that could change that. This AI-powered platform is now decking its 225,000 businesses with market insights to not just know their numbers but to understand how they stack up against their competition in the same...

TXNM Energy's Q3 2026 Hits Hard Amid Heat and M&A

TXNM Energy: A Strong Q3 2026 Amid Acquisition Waves Every so often, a company struts into earnings season and lays all its cards on the table. TXNM Energy just did that for Q3 2026, showing some robust numbers and setting tongues wagging on Wall Street. With GAAP earnings per diluted share shooting up to $1.50 from $1.22 the previous year, it's clear the power play is...

Prenatal Omega-3s and Childhood Brainpower: A Study

Omega-3s and Child Development: Why the Buzz? Alright, let's dig into a study that's grabbing attention: it's all about how those little omega-3 fatty acids, the kind found in walnuts and fish, might just be crafting our kids into brainiacs. The latest research published in the European Journal of Epidemiology connects these fatty acids to cognitive prowess from childhood...

Geolava, Vaidio, Sensoneo Triumph in Texas Pitch Contest

North Texas Lights the Innovation Torch Big moves are happening in North Texas, with a pitch competition that's more than just smoke and mirrors. We're talking about an arena where regional challenges meet cutting-edge solutions, and out of a global mix, Geolava, Vaidio, and Sensoneo snagged the 2026 North Texas Connected Innovation Pitch Contest crown. It's high stakes...

Keller Joins JC Behavioral Health Council, RCA Shines

RCA's Role in Behavioral Health Standards Kendall Keller just grabbed a prime seat at a table that could shape the future of behavioral healthcare in the U.S. Appointed to the Joint Commission’s (JC) Behavioral Health Care & Human Services Advisory Council, Keller isn’t lounging around. Here’s someone with 18 years under her belt, tasked with steering the ship for...