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Investing with your values

People are becoming more self conscious of the world we live in. We see more and more people investing with their values, placing their money in what they believe in. Nowadays, we see individuals investing in things like renewable energy, solar panels, and the environment. Additionally, people may invest in companies that support the causes they are most interested in (i.e. health care, workplace diversity, community development, religion, human rights, etc.). They may avoid investing in mutual funds or stocks which are considered vice stocks. Today, there are so many different ways to invest your money, they have mutual funds and stocks for just about everything. It’s up to you to decide how to best invest your money and this isn’t always easy, even for the most seasoned investors. I’ll try to give a few examples of socially responsible funds I feel are a good investment in this post.

Investing with your values

Socially Responsible Funds

Here is the best definition I could find for socially responsible funds, I found it at InvestorWords, a fantastic financial website. Socially responsible funds are typically a mutual fund that only invests in companies that meet certain ethical and moral standards. Some examples include: funds that only invest in environmentally conscious companies (“green funds”), funds that invest in hospitals and health care centers, and funds that avoid investing in alcohol or tobacco companies. Socially responsible funds try to maximize returns while staying within these self-imposed boundaries. Let’s look at some examples of socially responsible funds:

Parnassus Workplace (PARWX)
Here is a summary of the fund from Yahoo Finance: The investment seeks capital appreciation. The fund normally invests at least 80% of its net assets (plus borrowings for investment purposes) in companies believed by the fund’s investment adviser (adviser) to provide good workplaces for their employees. Companies with good workplaces usually are able to recruit and retain better employees, and perform at a higher level than competitors in terms of innovation, productivity, customer loyalty and profitability. These companies must, in the adviser’s opinion, be undervalued, but they must also have good prospects for long-term capital appreciation over the course of the expected holding period. What’s really neat about this fund is it that fund manager Jerome Dodson takes the list of companies from Fortune in their annual issue of “100 best companies to work for” and includes those companies in this fund. Parnassus, screens out companies from the alcohol, tobacco, gambling, and weapons-contracting industries, as well as companies that generate electricity from nuclear power.
Appleseed (APPLX)
Here is a summary of the fund from Yahoo Finance: The investment seeks long-term capital appreciation. The fund invests primarily in a portfolio of equity securities of companies that are undervalued in the opinion of the fund’s adviser. It also seeks to invest in companies that balance generating profits with an awareness of their impact on the environment and society in general. The fund may not invest in companies that derive substantial revenues from the tobacco, alcohol, pornography, gambling, or weapons industries. Its adviser actively trades currency futures contracts (long or short) for hedging or investment purposes. The fund is non-diversified.
Amana Trust Income (AMANX)
Here is a summary of the fund from Yahoo Finance: The investment seeks current income and preservation of capital, consistent with Islamic principles. The fund invests mainly in common stocks, including foreign stocks. Investment decisions are made in accordance with Islamic principles. It diversifies its investments across industries and companies, and generally follows a value investment style. The fund purchases only dividend-paying companies, which are expected to have more stable stock prices and tend to be larger companies.
Walden Social Equity (WSEFX)
Here is a summary of the fund from Yahoo Finance: The investment seeks long-term capital growth through an actively managed portfolio of stocks. The fund invests, under normal circumstances, at least 80% of its assets in a diversified portfolio of domestic equity securities, such as common and preferred stock. It may invest in companies of any size, but generally focuses on large capitalization companies. The fund incorporates comprehensive environmental, social and governance (ESG) guidelines in portfolio construction.
Ave Maria Rising Divided (AVEDX)
Here is a summary of the fund from Yahoo Finance: The investment seeks increasing dividend income over time, long-term growth of capital, and a reasonable level of current income. The fund will invest at least 80% of its net assets in the common stocks of dividend-paying companies that are expected to increase their dividends over time and to provide long-term growth of capital. Under normal circumstances, all of its equity investments (which include common stocks, preferred stocks and securities convertible into common stock) and at least 80% of the fund’s net assets will be invested in companies meeting its religious criteria (as discussed below). The fund may invest in companies of all sizes.
Monetta Young Investor (MYIFX)
Here is a summary of the fund from Yahoo Finance: The investment seeks long-term capital growth. The fund invests approximately 50% of its assets in exchange traded funds (ETF’s) and other funds that seek to track the S&P 500 Index. It may invest up to 10% of its assets in foreign stocks primarily through American Depository Receipts (ADRs).
Parnassus Small Cap (PARSX)
Here is a summary of the fund from Yahoo Finance: The investment seeks capital appreciation. The fund normally invests at least 80% of its net assets in the stock of companies with market capitalizations under $3 billion at the time of initial purchase. These companies must, in the opinion of the fund’s investment adviser (adviser), be undervalued, but they must also have good prospects for long-term capital appreciation over the course of the expected holding period. Small-cap companies might be less stable and have less established businesses than mid-cap or large-cap companies. It invests mainly in domestic stocks of companies that are financially sound and have good prospects for the future.
TIAA-CREF Social Choice Equity Retire (TRSCX)
Here is a summary of the fund from Yahoo Finance: The investment seeks a favorable long-term total return that reflects the investment performance of the overall U.S. stock market while giving special consideration to certain social criteria. Under normal circumstances, the fund invests at least 80% of its assets in equity securities. It attempts to track the return of the U.S. stock market as represented by its benchmark, the Russell 3000 Index, while investing only in companies whose activities are consistent with the fund’s social criteria. Its investments are subject to certain environmental, social and governance (ESG) criteria. The fund may invest up to 15% of its assets in foreign investments.
Calvert Conservative Allocation (CCLAX)
Here is a summary of the fund from Yahoo Finance: The investment seeks current income and capital appreciation, consistent with the preservation of capital. The fund is a fund of funds and seeks to achieve the objectives by investing in a portfolio of underlying Calvert fixed-income, equity and money market funds that meets the fund’s investment criteria, including financial, sustainability and social responsibility factors. It intends to invest 20% to 40% of net assets in Calvert funds that invest primarily in equity securities, 60% to 80% in Calvert Bond Portfolio, and 0% to 10% in Calvert Money Market Portfolio.
Winslow Green Growth (WGGFX)
Here is a summary of the fund from Yahoo Finance: The investment seeks long-term capital growth. The fund is a growth equity fund. It invests at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of environmentally sustainable companies. Although the fund may invest in companies of any size capitalization, the fund intends to invest a significant portion of its assets in domestic small-capitalization companies (i.e., companies with a market capitalization below $2 billion) that, in the Advisers view, represent attractive growth investment opportunities. The fund may invest up to 20% of assets in foreign securities, which may include emerging markets.

Investing with your values

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