A cause for investing.
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, including Calvert offerings and Pax World, that will avoid Treasuries, since the proceeds could be used for defense spending.
Just last fall, many of the nation's topmost socially responsible funds lifted their ban on South African investing after Nelson Mandela's appeal to life sanctions.
Many socially responsible funds took a beating in 1993, largely because they tended to favor battered industries, such as health, retail and consumer-staples stocks, says John Rekenthaler, editor of Chicago-based Morningstar Mutual Funds. But by no means is socially conscious investing incompatible with profitability.
Take the Parnassus Fund. Its three-year annualized return of 35.57% places it in the top percentile of all growth mutual funds.
Another world-class stock fund is Calvert World Values Global Equity. As its 19.2% year-to-date returns show, this fund has picked some winners.
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|Title Annotation:||socially conscious mutual funds|
|Date:||May 1, 1994|
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