The Leading Purveyors of SRI Funds

There are over 250 SRI funds, but only a handful of major players. Note that we don’t comment on specific investments or fund companies publically, but we do have a short list of vetted SRI favorites we share with members. Here’s a brief guide to the most experienced firms and links to research them.

You’ve probably heard of Calvert Investments.  They’re one of the most popular fund companies that offer diverse options for socially responsible investing. They offer over 20 equity, bond, and balanced SRI mutual funds. By a clear margin, those Community Ladders members that have SRI investments are invested in Calvert funds (that preceded their joining Community Ladders). Bill, our Founder, cautions people to examine both the annual fees the funds charge as well as the loads (loads are a percentage of your investment, typically one to five percent, that the company takes either when you buy or sell shares). It is only in pursuit of appropriate SRI investments that Bill will even discuss funds with loads; outside of SRI, Community Ladders has never, ever recommended a fund with a load.

Pax World Funds offer seven equity and bond SRI funds, including a Global Women’s Equality Fund that assesses women’s representation on the companies’ board and senior management. Domini offers a domestic and international stock and a social bond fund.

Social Funds provide an exhaustive list of available SRI mutual funds.

There are only a few passively-managed SRI investments, such as the iShares KLD 400 Social Index or MSCI USA ESG Social Fund Index.  The longest-running SRI index is the FTSE KLD 400, which was started in 1990.  Vanguard’s FTSE Social Index fund is probably the lowest-cost passively-managed social index fund (see our blog post “Concerns about SRI funds” for some insight into this Vanguard fund, and for a discussion of active versus passive mutual funds).

Those interested in these investments will need to fully understand the selection methodology of these social funds, as the definition of what constitutes SRI varies widely.

Community Investing is the latest SRI offering in the market. Community investing institutions use investor capital to provide loans to individuals and organizations that do not have access to credit. These loans are used for housing, small business creation, or education.  With Microplace, you can invest as little as $20, and can choose your preferred financial return (usually between 1-3%) and length of the loan. Examples of loans include those that support fair trade farmers in Costa Rica, or help small entrepreneurs in rural Texas.

For those who are passionate about these issues, it can be very exciting to know that you are able to both save for your retirement and invest in companies that you believe in.  But before you go shopping in the SRI funds market, you need to know the drawbacks associated with them. Please see our “Concerns about SRI funds” and “Alternative Approaches to Socially Responsible Investing” blog entries for more information.

Alvin Carlos oversees the finances of a social justice organization in Washington DC.  He is a Financial Adviser at Community Ladders. 

Tec Han manages investments for Clark Enterprises, the parent company of Clark Construction.  He is Director of Financial Planning and Training at Community Ladders.