Socially Responsible Funds

Socially responsible funds have been becoming more and more popular in recent times. These companies take part in socially responsible investing (SRI), which means they invest only in companies that partake in ethical business practices.

1. Companies that have an unethical product (such as tobacco, alcohol, weapons, ect)

2. Companies that have unethical business practices (such as cutting down the rainforest)

The idea behind socially responsible investing is that you can both make a profit, and feel good about it too. By not buying a company’s stock you are also hurting unethical companies as their stock may go down, due to lack of buying.

The main argument against SR investing is that often times it underperforms the market as a whole. By contrast the Vice fund which is a fund that only invests in stocks with unethical business practices has vastly outperformed the market.

However, most people investing in these funds believe that it is possible to outperform the market. The idea being those ethical companies do not get hit with lawsuits, government fines, or anything other challenges unethical companies face.

Today over $2 trillion dollars is invested in a SR way, and there are 200+ Socially responsible funds to choose from. It is up to the individual investor to decide if this is the type of fund they want to get into.

If you are very concerned about possibly getting into sinful Stocks these funds will probably be a good approach for you.