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What If Clients Want Funds That Screen For Cruelty To Animals?

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What If Clients Want Funds That Screen For Cruelty To Animals?


Financial advisors still have a hard time finding mutual funds for clients who shun cruelty to animals.

At many socially conscious funds, “there are some basic animal rights screens, but they tend to be rather loose,” according to Eric Packer, a registered principal in the Wellesley, Mass., office of Progressive Asset Management Inc., a unit of Financial West Group Inc.

Some fund managers, for example, avoid companies that use animals in testing of cosmetics, but accept companies that use animals in testing of drugs, Packer says.

People for the Ethical Treatment for Animals, Norfolk, Va., recommends setting stricter limits. Supporters should avoid funds that invest in pharmaceutical companies or other companies that use animals in any kind of research, including medical research, PETA says.

Investment guidelines posted on the PETA Web site advise supporters to investigate carefully if the holdings listed in a fund company prospectus include stock in mining companies, food production companies or other companies that might hurt or exploit animals.

“You can also let mutual fund companies know that you would be willing to invest more in their funds if they tightened their screening requirements and expanded the types of cruelty covered in their screens,” PETA says.

Pure cruelty-free plays are scarce.

Rocky Mountain Humane Investing Corp., Boulder, Colo., carefully screens its “separate accounts,” or personal mutual funds, to weed out companies that kill, abuse or exploit animals, but it says new clients need $100,000 in investable assets to set up separate accounts.

Beacon Global Advisors Ltd., Bethesda, Md., shut down a small cruelty-free value fund in January 2000.

IPS Advisory Inc., Knoxville, Tenn., manager of the IPS Millennium Fund, a fund often praised by animal rights activists, emphasizes in fund marketing materials that ethical investment screens are not part of the primary stock selection process.

The Humane Society of the United States, Washington, has tried to create a cruelty-free retail fund alternative by working with Salomon Brothers Funds, a unit of Citigroup Inc., New York, to set up the Humane Equity Fund.

The society seeded the fund, which invests in growth and value stocks, with $8 million of its own assets. The fund opened in February 2000 and generated a total return of 7.3% that year.

Figures from Standard & Poors, New York, show the fund lost 10.77% of its value this year, as of Aug. 26 and now has about $9.5 million in assets.

Representatives for the Humane Society and Salomon failed to return repeated telephone calls seeking information about their companies plans for the fund.

Reproduced from National Underwriter Life & Health/Financial Services Edition, September 24, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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