Question

There are mutual funds that invest in stocks of socially responsible or ethical or green companies. Perform a web search to identify at least three such funds and look up their performance. How have these funds performed over the past five years compared to funds that invest more broadly? Explain the findings.

Answer 1

Answer: Yes, there are mutual funds that invest in stocks of socially responsible or green companies. Examples are as following:

Fund name (Socially responsible)	5 years return	Fund name(others)	5 years return
iShares MSCI KLD 400 Social ETFs	10.07%	American funds capital world growth & income fund	10.80%
SDRP S&P 500 Fossil fuel reserve	14.83%	Vanguard small cap index fund	12.92%
Vanguard FTSE social index	11.5%	Fidelity 500 Index fund	15%

These socially responsible funds invest into the companies that are doing good for social cause and society. If we compare the return of socially responsible funds with the normal mutual funds, we will find only slight difference because companies are coming up with more social responsibilities and investors are also getting aware about the society, nature and people.

Note: SDRP S&P 500 Fossil fuel reserve's return is of 3 years because 5 year's return is not available.