Does Socially Responsible Investing Pay Off?

Socially Responsible Investing has not always fared well with investing gurus. There persists a perception that if you want returns, avoid investing with your heart.

But that may be an outdated conclusion as Socially Responsible Investment funds (SRIs) have proliferated and grown better at providing good returns along with a good conscience.

An article in Contribute Magazine recently pointed out that SRI funds are matching or even outperforming the S&P 500. The Domini 400 Social Index, that tracks SRIs much like the S&P 500, shows that since 1990, the S&P 500 had a total return of 10.57% versus an 11.01% return of the Domini 400.

It seems that values and investing go well together. The article points out that there is an SRI for virtually "every religious belief, social cause, and global viewpoint," meaning that it should be relatively easy to pick one or more funds that match your ideals. And you won't be alone...between 1995 and 2007, total SRI dollars under professional management ballooned from $639 billion to $2.71 trillion, an increase of 324%.

Perhaps the popularity of SRIs is yet another example of the broad interest social causes have at this point in our history. One no longer needs to be a millionaire in order to be a philanthropist, and we can all add to our social impact with some savvy additions to our investment portfolios.

For more see:

• Cause Investing (Contribute Magazine)
• Socially Responsible Investing (about.com)