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Subject: Re: Screening non-SRI funds
From: Karen
Date: 10/05/00
Well, it's a while since you asked, but I just got around to reading the postings so...

When I first invested in mutual funds, I'd never heard of SRI; it wasn't very well-known back then. But there were three particular companies I abhorred. So I got the prospectuses and annual reports of a few funds that looked likely (as far as minimum investment required, risk/aggressiveness, and so on). In checking their holdings, I discovered that only one of them had no investments in the three companies I wanted to avoid, so I invested in that fund (and still have some money there, 16 years later).

If the fund isn't screening for social criteria, there's no guarantee that it won't invest in objectionable companies in the future. But there's really no other way to judge, under the circumstances. For that matter, not all SRI funds use the same criteria, so they are not universally acceptable to all investors. (For example, the religious funds sometimes screen out companies with same-sex partner friendly employment practices, while more liberal funds tend to favor the same practices.)

Having said that, I would make a broad generalization to say that small cap funds are probably better than large cap (fewer large corporations with who-knows-what going on somewhere in their holdings); bond funds are pretty safe if they don't invest in government bonds that fund military programs (ie, housing and education bonds and things like that are OK); and US investments are safer than foreign, if only because you're more likely to hear about any wrong-doings here than abroad. As I said, those are *very* broad statements.

When I first invested in mutual funds, the Internet was for ultra-geeks running their own BBSes and posting to Usenet. You can probably find a lot of what you want to know on the Web, without having to read all the prospectuses and annual reports. Check this site's Activist page for info on specific companies, and Co-op America's website (and others) for more on SRI funds.

Basically, you just have to do your own screening and pick the best according to your priorities. Then monitor whatever reports you get and change funds if your holdings become unacceptable.


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