'Socially Responsible Investments' Avoid Oil, Tobacco Companies

Source from:  By Keegan Kyle Post-Crescent Madison bureau Posted July 2, 2007 07/03/2007

Although the portfolios of mutual funds frequently contain profitable oil and tobacco companies, some fund managers try attracting investors through what is commonly called "socially responsible investing," or SRI. SRI mutual funds are based on goals, such as supporting labor rights, alternative fuel sources or environmental standards, or opposing gambling and tobacco. Of 8,000 mutual funds in the United States, about 200 were SRI funds in 2005, according to a report by the Social Investments Forum Foundation. Matt Canter, spokesman for Gov. Jim Doyle, said he was unsure whether the governor had ever considered investing in a SRI mutual fund. Some advocacy groups, such as the Sierra Club, manage funds that explicitly avoid oil and tobacco companies. "We have a strict prohibition against any extractive industries that are not certified sustainable," said Neil Stallings, director of business development for Sierra Club Mutual Funds. He said the organization's flagship Sierra Stock Fund has no holdings in the energy, materials or utilities sectors. Stallings said the "green fund" does not even invest in alternative energy companies because they tend to be too small and volatile for the large growth fund. Although the limitations have hurt the fund's recent performance compared to others on Wall Street, Stallings said, "Over the long term, our underexposure to energy ...... will propel the growth and value of our fund." Enditem