hr: Money

When people refer to ethical investing, they usually mean ethical practices, or the avoidance of unethical ones. However, we’re talking about a different sort of ethical investing.

Photo Credit: woodleywonderworks

There is a new breed of mutual funds that are around called Socially Responsible Mutual Funds, or (SRI’s). These funds have an underlying asset base consisting of companies or organizations that are reputed for being ‘clean’, or in practicing ethical business.

So if you’re a vegetarian, you might not want to let your money go to a company that relies on the killing of animals such as Kentucky Fried Chicken (KFC). There are websites which give you all the lowdown you need on Socially Responsible Investing.

Analysis over the years have shown however, that the return on these funds is slightly lower than average. Over a long term period, you are likely to get a return that is 0.7% less that regular investments if you practice SRI.

However, it is also true, that those who invest in these funds usually don’t care about the slightly lower returns. In addition, they are unlikely to sell when the markets are down like other investors, and this can lead to extremely good returns over the long run!

So if you’re looking to expand your share in earth saving activities, then this is a great way to contribute to what you believe in.