What are socially responsible mutual funds?
Socially responsible mutual funds hold securities in companies that adhere to social, moral, religious or environmental beliefs. To ensure the stocks chosen have values that coincide with the fund’s beliefs, companies undergo a careful screening process. A socially responsible mutual fund will only hold securities in companies that adhere to high standards of good corporate citizenship. (To learn more about shareholder rights and responsibilities, see Proxy Voting Gives Fund Shareholders A Say and Knowing Your Rights As A Shareholder.) Because people hold such a wide variety values and beliefs, fund managers have quite a challenge in determining the stocks that reflect the optimal combination of values for attracting investors. The specific criteria used when screening for stocks all depend on the values and goals of the fund. For example, funds with a strong sensitivity toward issues of environmental concern will specifically pick stocks in companies that go beyond fulfilling minimal