Net Gains: Investing With Convictions Intact

On the religious side of socially responsible investing, there are funds aligned with Catholic, Protestant and Islamic beliefs. A top Catholic funds family is Ave Maria. The GuideStone funds are affiliated with Southern Baptist Convention. Islamic-oriented funds include Amana Trust Growth and Amana Income.

Finding the Fund for You

For those interested in matching their portfolio with their beliefs, where should they start?

Doug Wheat, a Northampton, Mass., financial planner who specializes in socially responsible investing, advises investors to first consider which issues are important to them and how absolute in their convictions they wish to remain.

Once a person has settled on general principles to follow, an investor should not get too hung up on exact screening procedures for broadly screened social mutual funds.

"They're all a little bit different in their criteria. It's not that big a deal unless you have some belief you want to be strict about," Wheat said.

Once done with that process, Wheat says they should consider the same factors as with other mutual funds, such as performance.

In general, socially responsible funds are higher cost than otherwise comparable funds, according to Morningstar. That is partly because of the expenses associated with the screening process and partly because many of the funds are run by smaller investment firms.

As a whole, such funds do just as well as other mutual funds over the long term, says Morningstar.

For the socially responsible investor, it is possible to construct a fairly well diversified portfolio using just these types of funds. Most major asset categories are represented in the socially responsible arena. The exceptions, said Wheat, are emerging markets and real estate funds.

Some of his favorite socially responsible funds include Neuberger Berman Socially Responsible, Pax World Balanced, Parnassus Fixed Income, Winslow Green Growth and Portfolio 21, an international fund.

To find a particular fund you might wish to invest in, there are a couple Web sites that can help. The Social Investment Forum site, www.socialinvest.org, features charts that allow investors to compare funds. The charts are handy, but they are not exhaustive as they include only funds run by companies belonging to the organization.

A second site, www.socialfunds.com, provides information on a wider range of funds, including a number of religious-oriented funds.

You might take a look if you want to be sure you're making a killing you can live with.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

David McPherson is founder and principal of Four Ponds Financial Planning (www.fourpondsfinancial.com) in Falmouth, Mass. He previously worked as a financial writer and editor for The Providence Journal in Rhode Island. He is a member of the Garrett Planning Network, whose members provide financial advice to clients on an hourly, as-needed basis. Contact McPherson at david@fourpondsfinancial.com

Page
  • 1
  • |
  • 2
null
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...