Does it make good financial sense to invest in socially conscious mutual funds?
Socially conscious mutual funds are gaining in popularity. These funds, also known as socially responsible or ethical investment funds, have found a niche in the vast mutual fund marketplace. Although many investors would like to invest and feel good about where their dollars are going, the bottom line is ultimately long-term performance. How have they performed as a group? The answer, unfortunately, is similar to that for the mutual fund industry as a whole. Some have achieved above-market returns, while others are perennial under-performers compared with their relative indices. However, socially conscious investors seem to have a greater tolerance and patience with their mutual funds; they are willing to accept the possibility of marginally lower returns in exchange for feeling good about the companies in which they are investing. Socially responsible funds typically will not invest in corporations that manufacture weapons, tobacco products or alcohol. Many funds focus on companies t
