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Social funds: holding their own

By Compiledstaff / February 5, 2001



The market's downturn didn't keep socially and environmentally responsible mutual funds from earning top ratings last year, according to the Washington-based, nonprofit Social Investment Forum. Overall, they performed on par with or better than funds without social "screens."

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In 2000, 14 of the 16 screened funds with $100 million or more in assets earned four- or five-star ratings from Morningstar and "A" or "B" rankings from Lipper Analytical Services, both providers of investment information. That's 88 percent, compared with 69 percent in 1999. And of the 48 socially screened funds with three-year track records, nearly two-thirds received the highest marks, up from 57 percent in 1999.

Their performance debunks the old-school view that investors see lower returns when they put money into screened funds, says Steve Schueth, spokesman for the Social Investment Forum.

"Socially responsible investing can hold its own in any market environment, including the turbulence of 2000," Mr. Schueth says. He adds that while many tech portfolios underperformed, alternative-energy firms did extraordinarily well.

"It is no longer necessary for a social investor to look elsewhere in order to round out [his or her] portfolio. In virtually ever major asset class, there is a quality product," he says.

(c) Copyright 2001. The Christian Science Publishing Society