From
Your Perspective:
Socially responsible mutual funds
What socially responsible funds do
While SR funds may have strikingly divergent views on certain issues, many of them share a commitment to making their positions known, both to their
shareholders
and to the world at large. That may explain why an SR fund that adds or drops an investment often issues a press release announcing its position.
The following characteristics help define this rather loose confederation:
Advocacy. As major stakeholders in the companies they invest in, many SR funds use their financial clout to influence corporate policy. SR funds have also led the movement to require all fund directors to report their proxy votes to their investors.
Community investment. Some SR funds earmark a percentage of their assets to organizations that promote development in low-income communities. Some also have programs to encourage shareholders to donate a portion of their investment profits to charitable organizations.
One Vanderbilt University study suggests that SR funds offer their investors specific financial benefits. The research shows that because investors in SR funds are less focused on short-term gains than investors in conventional funds, they may be less likely to trade in and out of the funds. That means lower transaction costs for shareholders.
