Socially Responsible Mutual Funds

Just Another Corporate Come-On or a Real Alternative to Investing in Enron and WorldCom?

Does the idea of investing in your future via mutual funds appeal to you, but the idea of helping out zillionaire business owners who exploit both their workers and consumers get you sick in the pit of your stomach? For many people, the very idea of investing in stocks just seems, well, nauseating. If you've ever watched the stock of a company after news comes out that it has laid off workers or is going to be forced to downsize in any way, you've no doubt been repulsed the effect on the stock price to this news is typically to go up. Why is bad news for workers always good news for business?

Because the entire idea of investing in stocks carries with it the taint of exploitation of the workers, many people with a conscience shy away from the practice. On the other hand, when CNBC consistently reports how many people have become millionaires simply by investing in 401k and annuities and mutual funds, it's hard to resist. We all have future to think about and most of us have families to take care of and it's certainly admirable to have a conscience when it comes to making money, but few us have that privilege and those who have that privilege the most typically have the least problem with sticking a knife in their conscience.

Where is where the idea of investing in social responsible mutual funds came from. As usual, this somewhat lofty goal sprung from basic greed. Mutual fund managers realized there was a segment of potential customers out there who just weren't comfortable with sticking money into funds that supported corporate criminals like Enron, Exxon and WorldCom, among thousands of others. In order to get their fingers on the dollars of these kinds of people, somebody somewhere came up with the idea of creating a mutual fund that only invested in companies that cared about following laws and regulations and even-gasp!-non legal ethics.