Note that all of these links lead to external web sites and are not part of PBS.org or Wall $treet Week with FORTUNE.
Morningstar identifies more than 80 mutual funds as social investment vehicles, although, as always, one person's idea of social responsibility is another's ideological trap. However, many funds that identify themselves as social investors share a few principles, such as an avoiding companies that that engage in bad corporate governance, pollute too much or sell products widely considered harmful, such as tobacco. Other funds, such as those based on religious beliefs, focus on practices such as abortion or marriage benefits. There's even a "Vice Fund" that has a contrarian approach based on investing in companies viewed as "socially irresponsible."
Just remember: Always research the specific screens that a fund uses, to make sure they match your own morals and ethics.
Many "socially responsible" funds have had a mixed record compared to the broader market over the past several years, but one benchmark, the Domini 400 Social Index, over the past 10 years posted an annual average gain of 9.13 percent, better than the S&P 500's 8.53 percent return. And social funds have held up relatively well in the bear market: Among 87 funds tracked by the Social Investment Forum as of March 31, 2003, the average one-year performance was a decline of 20.3 percent, compared to a drop of 24.8 percent for the S&P 500. The 20 largest funds on the Forum's list lost an average of 16.1 percent for the 12-month period.
The Internet has plenty of information about social investing. Some prominent sites include:
Social Investment Forum is run by the non-profit Co-Op America, which teaches people to use the economic system to address what it perceives to be social and environmental problems. Online features include a beginner guide for social investing, directory of related services, and a list that can be used to track and compare the performance of many socially responsible funds.
SocialFunds.com has 10,000 pages of mutual funds, community investments, corporate research, shareowner actions, and daily news. The Web site is part of a network of online resources from financial services firm SRI World Group.
The Domini 400 Social Index is the most widely-followed benchmark of its kind. The 400 U.S. corporations that pass screens for ethics, financial value and social impact include about 250 companies in the S&P 500, another 100 large companies not in the S&P 500 but providing industry representation, and about 50 more companies with strong social characteristics, as defined by Domini Social Investments.
The GreenMoney Journal has been publishing its bimonthly magazine devoted to environmental and socially responsible investing for more than a decade, and has been online for the past eight years. Articles from the current issue are available free on the Web site.