The largest socially responsible mutual funds in terms of total assets under management are much smaller than the biggest traditional mutual funds, but they still provide some perspective on the growth and interest in the SRI approach.
Use this list and the links to the fund families to learn more about how the major SRI funds screen for investment options. But remember, big doesn't necessarily mean better. Performance is what counts.
The Ariel Fund is part of the family of mutual funds managed by Ariel Capital Management based in Chicago, IL. According to the firm the fund invests in companies with market capitalizations primarily under $1.5 billion, with an emphasis on small-cap stocks. Market capitalization is a way to determine the size of a company and is calculated by multiplying a firm’s outstanding shares by the dollar value of a single share. “Small-cap stocks” mean companies whose market capitalization is generally below $2 billion but above $300 million. The Arial Fund’s social criteria includes screens for environmental impact, tobacco, weapons, nuclear energy, and diversity.
Part of the Pax World Mutual Funds family based in Portsmouth, NH. According to the firm, Pax World Balanced invests in companies “that provide goods and services, such as health care, technology, pollution control, housing, utilities, and education, that improve the quality of life.” Pax World Balanced is a “domestic hybrid” fund, meaning it holds a mix of stocks and bonds of U.S. based companies.
PIMCO is one of the largest fixed-income management firms in the world. The PIMCO Total Return III Institutional is a fund for institutional investors such as pension funds. The minimum investment is $5 million. According to the firm the fund invests primarily in corporate bonds, U.S. government securities, and mortgage-related securities. Its investments may not go to issuers who engage in "the operation of gambling casinos, the provision of healthcare services, or the manufacture of alcohol, tobacco products, pharmaceuticals, pornography, or military equipment."
Ariel Appreciation invests in “mid-cap” stocks, which are companies with a market capitalization generally between $2 billion and $10 billion. According to the company, Ariel Appreciation limits its investments to firms the size of $200 million to $5 billion. It uses the same screens as the larger Ariel Fund: environmental, tobacco, weapons, nuclear energy, and diversity.
Parnassus Equity Income is a member of the Parnassus Funds family based in San Francisco. As an equity income fund it tries to grow through price appreciation, but also by investing largely in dividend paying stocks. According to the firm, the fund can invest up to 10 percent of its assets in community development loan funds. It may not invest in companies “that produce alcohol, tobacco, weapons, or nuclear energy.”