If you’re considering socially responsible investing (SRI) and want to explore the best mutual funds and exchange-traded funds (ETFs) in this category, you’re in the right place. SRI funds allow you to align your investments with your ethical values while potentially achieving financial goals. Here’s a list of some of the top SRI funds to consider for your portfolio.
1. Vanguard FTSE Social Index Fund (VFTAX)
Overview: The Vanguard FTSE Social Index Fund is a low-cost SRI mutual fund that tracks the FTSE4Good US Select Index. It invests in companies that meet strict social and environmental criteria, making it a strong choice for ethical investors.
Why Invest: VFTAX offers broad market exposure while screening out companies with poor ESG practices. It’s an excellent option for investors seeking a diversified SRI fund.
2. Parnassus Core Equity Fund (PRBLX)
Overview: The Parnassus Core Equity Fund is known for its rigorous selection process. The fund focuses on ESG factors and selects companies with strong ethical and sustainable practices.
Why Invest: PRBLX has a strong performance history and is actively managed. It’s an excellent choice for those who want to invest in companies with a proven commitment to ethical practices.
3. iShares MSCI KLD 400 Social ETF (DSI)
Overview: The iShares MSCI KLD 400 Social ETF is an ETF that tracks the performance of the MSCI KLD 400 Social Index. It provides investors with exposure to 400 U.S. companies with high ESG ratings.
Why Invest: DSI is a low-cost, passively managed ETF that offers broad market exposure. It’s suitable for investors looking for a simple and cost-effective SRI option.
4. Calvert Equity Fund (CSIEX)
Overview: The Calvert Equity Fund is a mutual fund that screens for companies with strong ESG practices. It actively selects investments based on its SRI criteria.
Why Invest: CSIEX has a history of outperforming its benchmark and a strong commitment to ethical investing. It’s a solid choice for those who prefer active management in the SRI space.
5. iShares Global Clean Energy ETF (ICLN)
Overview: The iShares Global Clean Energy ETF focuses on clean energy companies. It tracks the S&P Global Clean Energy Index, providing investors with exposure to renewable energy and related industries.
Why Invest: ICLN is an excellent choice for those who want to support companies driving the transition to clean energy. It’s well-suited for investors concerned about environmental sustainability.
6. TIAA-CREF Social Choice Equity Fund (TISCX)
Overview: The TIAA-CREF Social Choice Equity Fund is an SRI mutual fund that invests in companies with strong ESG profiles. It uses both positive and negative screens to create its portfolio.
Why Invest: TISCX offers a balanced approach to SRI, and it’s suitable for investors who want to align their investments with ethical values while maintaining diversification.
7. iShares ESG MSCI USA ETF (ESGU)
Overview: The iShares ESG MSCI USA ETF tracks the MSCI USA Extended ESG Focus Index. It focuses on U.S. companies with strong ESG ratings.
Why Invest: ESGU is a cost-effective and passive SRI ETF, making it a convenient choice for investors who want exposure to socially responsible companies without active management fees.
Investing in socially responsible mutual funds and exchange-traded funds (ETFs) not only allows you to grow your wealth but also contribute to positive social and environmental changes. Here are more SRI funds to consider for your investment portfolio:
8. TIAA-CREF International Equity Fund (TCIEX)
Overview: The TIAA-CREF International Equity Fund is an SRI mutual fund that focuses on international stocks with strong ESG characteristics. It provides investors with an opportunity to diversify globally while maintaining ethical standards.
Why Invest: TCIEX offers international exposure while adhering to ethical investing principles. It’s an excellent choice for those who wish to extend their SRI strategy beyond U.S. borders.
9. iShares MSCI ACWI Low Carbon Target ETF (CRBN)
Overview: The iShares MSCI ACWI Low Carbon Target ETF tracks the MSCI ACWI Low Carbon Target Index. This ETF focuses on companies with lower carbon footprints, promoting environmental sustainability.
Why Invest: CRBN is a unique SRI option for investors who want to invest in companies actively reducing their carbon impact. It’s aligned with eco-conscious investors.
10. Domini Impact Equity Fund (DSEFX)
Overview: The Domini Impact Equity Fund is an SRI mutual fund that applies strict screens for ethical and ESG criteria. It actively selects companies that align with its values.
Why Invest: DSEFX has a long history of ethical investing and aims to promote positive change through its investment choices. It’s a compelling option for investors dedicated to SRI.
11. iShares Global Impact ETF (SDG)
Overview: The iShares Global Impact ETF tracks the Morningstar Global Sustainability Index. It focuses on companies that contribute to the achievement of the United Nations Sustainable Development Goals (SDGs).
Why Invest: SDG is an innovative SRI ETF for investors interested in companies actively addressing global challenges such as poverty, inequality, and climate change.
12. Pax Ellevate Global Women’s Leadership Fund (PXWEX)
Overview: The Pax Ellevate Global Women’s Leadership Fund is an SRI mutual fund with a unique focus on gender diversity. It invests in companies with strong records in promoting women’s leadership.
Why Invest: PXWEX is an empowering choice for investors who want to support gender diversity in corporate leadership while achieving financial objectives.
Read more: Socially Responsible Investing: A Path to Profits with Purpose
13. Xtrackers MSCI EAFE ESG Leaders Equity ETF (EASG)
Overview: The Xtrackers MSCI EAFE ESG Leaders Equity ETF tracks the MSCI EAFE ESG Leaders Index. It provides exposure to developed market companies with strong ESG profiles.
Why Invest: EASG is an excellent choice for investors seeking SRI exposure to international markets while maintaining ethical standards.
14. Brown Advisory Sustainable Growth Fund (BIAWX)
Overview: The Brown Advisory Sustainable Growth Fund is a mutual fund that invests in companies with a strong focus on sustainability and responsible business practices. It employs rigorous ESG criteria to select its holdings.
Why Invest: BIAWX offers a concentrated portfolio of companies actively contributing to sustainable growth. It’s an ideal choice for investors committed to long-term environmental and social progress.
15. Xtrackers S&P 500 ESG ETF (SNPE)
Overview: The Xtrackers S&P 500 ESG ETF tracks the performance of the S&P 500 ESG Index, which consists of companies from the S&P 500 with strong ESG profiles.
Why Invest: SNPE is a cost-effective way to gain exposure to socially responsible companies in the U.S. It’s a suitable choice for investors who want to align their investments with ESG values while tracking the S&P 500.
16. Neuberger Berman Socially Responsive Fund (NBSRX)
Overview: The Neuberger Berman Socially Responsive Fund is a mutual fund that employs a flexible approach to SRI. It focuses on companies demonstrating strong ESG practices and adjusts its portfolio accordingly.
Why Invest: NBSRX offers flexibility and adaptability in the SRI space, making it a solid choice for investors who want to stay aligned with their values while adjusting to market changes.
17. SPYG SSGA Gender Diversity Index ETF (SHE)
Overview: The SPYG SSGA Gender Diversity Index ETF tracks the performance of the SSGA Gender Diversity Index, which focuses on companies promoting gender diversity and equality in the workplace.
Why Invest: SHE is a unique ETF for investors who want to support gender diversity and women’s leadership while achieving financial goals.
18. Amundi MSCI World ESG Leaders Select UCITS ETF (ESGW)
Overview: The Amundi MSCI World ESG Leaders Select UCITS ETF tracks the performance of the MSCI World ESG Leaders Select Index. It provides exposure to global companies with strong ESG leadership.
Why Invest: ESGW is a global SRI ETF suitable for investors looking for worldwide exposure to ethical and responsible businesses.
19. TIAA-CREF Green Bond Fund (TGRNX)
Overview: The TIAA-CREF Green Bond Fund is a mutual fund that primarily invests in green bonds issued by entities committed to environmental sustainability.
Why Invest: TGRNX allows investors to support green initiatives and contribute to environmental causes while generating returns through green bonds.
20. JPMorgan ESG Ultra-Short Income ETF (ESGU)
Overview: The JPMorgan ESG Ultra-Short Income ETF aims to provide income to investors while adhering to strict ESG criteria. It invests in fixed-income securities.
Why Invest: ESGU is a unique option for income-oriented investors who want to align their fixed-income investments with ESG values.
Read more: SRI vs. Conventional Investing: A Comparative Analysis
These SRI funds and ETFs provide various options for investors seeking to incorporate social and environmental responsibility into their portfolios. However, please remember that all investments carry risks, and it’s essential to consult with a financial advisor to ensure your investment choices align with your values and objectives.
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