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"Radical" socially responsible investment (SRI) options
LarryL 12-09-2007, 2:37 PM | Post #2463228 |  3 Replies
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I am a small business owner who recently set up a 401K. I'm in my late 30's and have been saving for retirement for a few years. My employee is mid 20s. We are both staunch advocates of SRI, but, as M* points out, it's not so simple due to shortcomings of fund screens and actual holdings. We're interested in what I guess I'd call more "radical" SRI options. My employee has much more time for his investments to grow, so he'd likely accept a lesser rate of return if the investments had greater social benefits. With that in mind, and with the limitations that a 401K plan likely entails (I have just set one up), what ideas do folks have to invest in more radical SRIs (and I'm not necessarily talking about mutual funds, here)?

The most crunchy ideas I have are:

- Look at foreign, small-cap SRIs, but that is still an "order of magnitude" off in terms of social benefit for my employee, I think.

- He not participate in the 401K and instead we ink out a deal where his income is increased and he find super-grass roots investments. I'm not even sure what those might be -- got suggestions? Shorebank?

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Re: "Radical" socially responsible investment (SRI) options
sensei 12-11-2007, 9:49 AM | Post #2463635
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Recommending options available for "radical" SRI options is difficult because I really don't understand what you mean by the term. There are SRI funds out there like PAX World Balanced, which might suit your needs.  In reviewing the portfolio holdings for this fund, I noticed it included technology and health care stocks. This leads me to think that in addition to this balanced fund, you might want to explore growth fund options which have a large exposure to these sectors.

Then there is Amana Growth, which invests in accordance with Islamic principles-no alcohol or tobacco stocks, no banks, etc. I would consider this an SRI fund.

You might also look into funds which contain a lot of "green" companies - companies involved in searching for alternative energy sources, pollution control, etc. I think the Forward Funds has a fund tied into the Sierra Club. However, I know little about it.

These are a few ideas to explore, but I don't know how promising these options will be.

Good luck.

 

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Re: "Radical" socially responsible investment (SRI) options-Update
sensei 12-11-2007, 9:06 PM | Post #2463863
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Came across this article, which might help.

ttp://www.thestreet.com/s/five-eco-friendly-funds/newsanalysis/conscious-companies/10393815.html
Re: "Radical" socially responsible investment (SRI) options-Update
weiwentg 01-14-2008, 7:01 AM | Post #2476167
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SRI as an industry is fairly well-developed over the large cap arena. funds like Pax and Neuberger Berman Socially Responsive also include a lot of mid caps and some small caps, and some international stocks as well.

however, and I think this is what you're asking, there aren't a lot of good small cap SRI funds. Calvert and Citizens have a whole bunch of crappy ones. Winslow Green Growth (WGGFX) was mentioned in that article, but it is risky. ditto for international funds: Calvert and Citizens have crappy ones. Portfolio 21, mentioned in the article, is a global fund and it's a little expensive.

M*'s coverage of SRI bond funds is scarce. frankly, Pax World Balanced is the safest choice. 

and to my knowledge, there's no SRI real estate fund, or commodities mutual fund. but surprise, surprise: there are actually some SRI hedge funds:

http://www.sri-advisor.com/commentary.html?id=15 

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