February 17, 2010

SRI Outperformance: Socially Responsible Funds Beat Indexes '09

A review of 160 socially responsible mutual funds from 22 members of the Social Investment Forum (SIF) finds that 65 percent outperformed their benchmarks in calendar year 2009, most by significant margins.

Many socially responsible investors want to do the right thing with their funds while still earning respectable results. According to the Social Investment Forum, that was exactly what happened in 2009: A review of 160 socially responsible mutual funds from 22 members of the Social Investment Forum (SIF) finds that 65 percent outperformed their benchmarks in calendar year 2009, most by significant margins.

These SRI funds topped benchmarks across nearly all asset classes, including balanced, large cap, small cap and global funds, as well as bonds. The performance data that was analyzed by the SIF included all 12 months of 2009 and was provided by an independent third party, Thomson Reuters.

Particular standouts on SRI mutual fund performance were the 73 large cap funds, the largest single category of SIF member funds -- nearly three out of four (72.6 percent) outperformed the S&P 500. On average, large-cap SRI funds bested the S&P 500 by more than 6 percentage points. A majority of the large-cap funds offered by SIF members also outperformed the S&P 500 over three years and 10 years.

"This analysis underscores the reality that socially responsible investments offer what are genuinely competitive returns," says Cheryl Smith, chairman of the board at SIF and president at Boston-based Trillium Asset Management Corporation. "In fact, the 2009 data show that SRI funds specializing in large-cap stocks have turned in an extremely strong performance that outpaced the S&P 500 over both the short term and the long term."

The 22 fund families represented in the SIF analysis are: Access Capital Strategies; AHA; Appleseed; Ariel; Azzad; Calvert; Community Capital Management; Domini; Gabelli; Green Century; Integrity; Legg Mason; Meeder Asset Management; MMA Praxis; Neuberger Berman; New Alternatives; Parnassus; Pax World; Portfolio 21; Sentinel; Walden; and Winslow.

Full results are available online.


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