Socially Responsible Investing by Christina Mae Olson, CFP®

LBGT clients are very interested in Socially Responsible Investing (SRI). SRI is a huge and growing industry. People want to know that their money is being invested in positive ways. Some investors, for example, would never own a mutual fund if they knew that Phillip Morris and Exxon Mobile were major holdings in the fund. There are some fantastic mutual funds out there that actually screen for such things like:

How do you find out if your mutual fund owns companies that are offensive to you? There are several ways to research a mutual fund. Morningstar is an independent rating company. Morningstar (www.morningstar.com) has a free service for anyone who wants to evaluate their funds. I use Morningstar to find out how stellar a fund’s investment return has been over the years. I stick to funds that have been in business for at least 10 years. Morningstar also reveals all the costs associated with a mutual fund. I never recommend funds with a sales load and I nearly always pick funds with annual expenses less than 1%. Morningstar will also tell you the actual underlying companies that are in a particular fund.

The Social Investment Forum (www.socialinvest.org) has excellent information on SRI mutual funds. They maintain a list of all SRI funds which currently numbers around 80. There are only 8 SRI mutual funds that meet my basic criteria for a good mutual fund. Here are my favorite SRI mutual funds – all of which are older than 10 years and have solid investment returns; all are no-load/no sales charge funds; all but one have annual expenses of less than 1%:

It’s interesting to note that one fund, Bridgeway Blue Chip 35 Index Fund, while appearing to meet my criteria for a perfect SRI mutual fund – actually holds several “offensive” companies (Exxon Mobile, Chevron Texaco, Walmart). It almost slipped through my screens, but I backed off when I saw those names. Upon closer inspection – the Social Investment Forum includes this fund because it screens out tobacco companies.

Here are some more great resources to check out if you are interested in socially responsible investing:

Please contact me if you would like more information on SRI mutual funds and/or ways to invest your money in a socially responsible way. If you are willing to do a little research you will be able to find suitable places for your money and also feel good about how they use your money.

Chris Olson is a Certified Financial Planner™ practitioner with a fee-only private practice. You can reach her at 608-525-9818 or CMOney@centurytel.net.