Investors by the scores realize they can unite their social concerns and their portfolios by investing in socially responsible mutual funds. And, the list of such funds is growing.
Socially responsible investing means different things to different folks, depending on where their conscience draws them. It runs the gamut animal rights, equal opportunity employment, world peace, low-income housing, community development and environmental issues--according to Kinder, Lydenberg, Domini & Co. Inc. This Cambridge, Mass., firm known for the Domini Social Equity Fund, tracks the performance of companies that pass multiple social screens. Granted, there is no clean or pure investment, social or otherwise, but that doesn't keep socially responsible fund managers from canvassing the business practices of their holdings.
"With any of our holdings when making a decision to invest, we look at a company's financials first, then its social policy," says Diane M. Coffey, vice president of the Dreyfus Third Century Fund. This longtime favorite has a three-year average return of 13.99%.
In general, socially responsible funds shun companies related to tobacco, liquor, gambling and weapons. There are even a handful of funds...