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Different shades of green

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While some investors may jump at the chance to invest in socially responsible funds, it’s wise to approach green funds as you would any other, warns Michael Herbst of Morningstar.

Some funds define “green” differently and invest in companies that produce environmentally friendly products, while others invest in companies that simply avoid negative impact on the environment. That may seem a minor difference, but some funds may pass the “green” test, but invest in companies with other violations.