How do I Choose the Best Socially Responsible Mutual Fund?

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  • Written By: Laura M. Sands
  • Edited By: Heather Bailey
  • Last Modified Date: 19 September 2018
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Choosing a socially responsible mutual fund involves researching several different funds and the individual investments represented by each. Working closely with a fund manager, you can gain insight into which mutual funds invest in socially responsible companies. A fund manager will help you assess which funds may be appropriate for you depending upon the level of risk you are willing and able to take, and the rate of return you are interested in. Another consideration when researching a socially responsible mutual fund is to assure that the investments within the fund also align with your own social priorities and principles.

A socially responsible mutual fund involves investments known as green investments or ethical investments. Ecologically friendly companies, fair labor companies and social improvement projects are among the investment opportunities typically contained within a socially responsible mutual fund. Even prior to contacting a fund manager, you may be able to find a socially responsible mutual fund online. Doing so in advance helps you take your time in studying how funds are performing in order to have an idea of the risk level and rate of return before sitting down to consider an actual investment with a fund manager.


Choosing the best socially responsible mutual fund will also require you to define what it is you value in terms of the stocks you invest in. While some funds focus primarily on green investing, others may focus more on ethical investment opportunities. Although the rate of return is important to these investors, that employees are treated fairly, that animals are not harmed or land destroyed in the process of the company’s business is important to socially conscious investors. In assessing your own values, you’ll be able to narrow your focus down and determine which type of progressive investing you are interested in.

After deciding on which type of socially responsible mutual fund to invest, gather several with the same focus and compare the fund performance and rate of return on each one. While it is important to make an ethical investment, it is just as important to earn money in the process. In assessing these factors, also consider the level of risk involved in each. At this point, you should have a general idea of which ones match your conscience, your risk and which ones will make you the most in terms of profit. Select the socially responsible mutual fund that you will be the most comfortable with in the long run, as well as the one that will bring you a comfortable rate of return.



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