Thursday, October 13, 2005

Enriching Yourself with a Clear Conscience

Social issues funds, which started with the PAX fund (now a fund family) 10-15 years ago, continue to grow in popularity. This popularity does belie certain problems, such as comparatively high expense ratios, limited small cap options and limited foreign investment options. Some loose categorizations are available; funds tend to emphasize peace (military contractors, chemicals), others environment and human rights (worker treatment, recycling, pollution control), still others moral values (abortion products, gambling, pornography, tobacco). Nevertheless, there is considerable overlap between categories such as the New Covenant Fund (affiliated with the Presbyterian Church (PCUS?)), which combines the peace and moral values screens. Among funds mentioned as being worth considering were the Ave Maria funds, Calvert Social Investment and Vanguard's new Calvert Social Index, MMA Praxis International, Neuberger Berman Socially Responsible and Pax World Balanced.

Those investing in socially-oriented funds are likely to go in either of two directions: either a major investment because of moral beliefs or commitment to a cause or a minor supplement to diversify their portfolio. In most cases, the best reason to invest in one of these funds would not be financial but psychological or spiritual.


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