Mutual Funds | Mutual Funds And Socially Responsible Investment

Socially responsible investment. are analyzed globally. SRI's agenda is to promote a set of values ??that are considered ethical and "earth friendly" by investing in companies that exhibit these values ??into its corporate structure in the workplace, in their working practices in its concern for the environment and its impact on the community (including respect for the rights of indigenous peoples). SRI intentionally excludes certain business sectors that are considered healthy for the planet, such as weapons, snuff and gambling.

Although socially responsible investing originally started decades ago with a religious agenda to avoid the companies that promote addictive behaviors (alcohol, snuff and gambling), was developed in the 1970s to include social programs and ecological. Today, social and ecological problems are at the forefront of socially responsible investing.

Mutual funds that specialize in SRI usually focus on a particular agenda, and only hold shares in companies that are consistent with the values ??of SRI. For example, some funds can only buy shares of companies that manufacture and promotion of green energy products. Other funds will only buy shares in companies that practice fair trade. Others actively avoid actions of any company involved in the manufacture or sale of weapons, ammunition and military products.

Fund managers screen potential companies for socially responsible practices, as well as profitability. Once these criteria are met, the fund manager makes decisions about the characteristics of the securities to be included. At this point, the SRI mutual fund starts to look like any other mutual fund. The fund manager decides to small cap or large-cap stocks, whether to invest exclusively in domestic companies or be global investment if the goal is for growth or income.

As for profitability, socially responsible investment funds are comparable to other traditional investment funds. When you stop to think about it, this makes perfect sense. In SRI fund manager is more flexible in their criteria for selecting a good investment. She 's just applied an additional filter the selection of the shares of profitable companies and the sound.