Monday, January 25, 2010

Surprise! Green Goes Black: SRI funds beat the S&P 500

They have long been derided by mainstream investors.  And in many cases, with good reason.  Socially Responsible mutual funds were small (higher risk), cost more (generally at the top of the list for fees-charged) and unable to beat the usual benchmarks most funds are held against.  That is until this year.

As it turns out, investing in socially responsible funds would have done the investor a world of good while doing the world some good.  We all know now that actively managed mutual funds outperformed the S&P 500 index in 2009.  While critics suggest that this is cyclical - and they may be right on some counts - the fact that 65% of these SRI funds who focus on businesses doing the "right thing" not only for their shareholders but the world in which these shareholders live, took much of the investment world by surprise.  Read more to find out whether it is socially responsible to outperform.

Paul Petillo is the Managing Editor of

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