Social Investment Funds Growing

Is your area taking advantage of socially responsible investment funds as a growth capital source for local businesses? Maybe this is an area you should explore in the future.

As stock prices were tumbling through the worst bear market in a generation, socially responsible investing continued a steady gain in popularity, according to a study released last week.

In 2002, $162 billion was invested in mutual funds that screen for one or more non-financial criteria, up 19 percent from two years earlier, according to a biennial study from the Social Investment Forum, a trade group. During the same two-year period total investments in mutual funds, excluding money market funds, fell more than 19 percent.

Socially responsible funds still represent only a tiny 3.9 percent of the total $4.1 trillion invested in stock and bond mutual funds. But when the impact of large institutional investors is included, socially responsible investing has moved far closer to the mainstream.

Many giant pension and trust funds that are run for the benefit of teachers, government workers, unions, religious institutions and foundations now routinely use social criteria to guide their investment decisions. All told, some $2.18 trillion in assets under professional management falls under the rubric of socially responsible investing, or about 11 percent of the nation’s total $19.2 trillion in managed money, according to the study.

Download the report here.