In addition to mutual funds, there are separate managed accounts, exchange-traded funds, index funds, individual stocks and bonds, community development investments, and private equity and alternative investments, all of which make it possible to honor the diversification tenets of modern portfolio theory and the industry guidelines for prudence and fiduciary responsibility, which can reduce volatility and improve long-term returns.
But don't just take our word for it! There's plenty of research available to those who want scientific proof that integrating environmental and social factors does not have a negative impact on performance. In 2007, the United Nations released the report, "Demystifying Responsible Investment Performance" (available for free at www.unepfi.org), a meta-analysis that compares 20 academic and 10 broker SRI studies to conclude that 27 of the 30 research studies show either a positive or neutral correlation between social and financial performance. Other peer-reviewed and published studies have been awarded the prestigious Moskowitz Prize, sponsored annually by the Social Investment Forum. A compendium of all the major academic studies on SRI can be found at www.sristudies.org.
Another indication of the competitive performance of SRI funds is the performance of individual SRI products. The Domini Social 400 Index, for example, has outperformed the S&P 500 since it started in 1990. The Social Investment Forum maintains a Mutual Fund Performance Chart of its member funds, while www.socialfunds.com has a Mutual Fund Center (www.socialfunds.com/funds/mfc.cgi) which also provides details on financial performance.
Please remember that past performance is no guarantee of future results. All investments can lose value. |
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