| Despite
the recent stock market downturn, socially and environmentally
responsible mutual funds are continuing to outperform all other
mutual funds as a group, according to data released in July
by the non-profit Social Investment Forum (SIF). Ten of the
15 screened funds with $100 million or more in assets earned
top marks for performance from either or both Morningstar and
Lipper Analytical Services for the one- and three-year periods
ending June 30, 2001. |
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Of the broader universe of 46 socially screened funds with a three-year
performance record that were tracked by the SIF, more than half
received the highest marks from either Morningstar or Lipper. How
do the SRI funds stack up to all other funds as a group? According
to Morningstar data, just under a third of all mutual funds get
either four or five stars, compared to 38 percent of the socially
responsible funds mutual funds tracked by Morningstar.
Steve Schueth, spokesperson for the SIF and president of First Affirmative
Financial Network, said, “This mid-year report tells an important
story. Our continued strong relative performance shows that, even
when the economy and the equity markets take a nosedive, socially
and environmentally responsible funds remain sound choices.”
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“Our
continued strong relative performance
shows that socially and environmentally responsible
funds remain sound choices.”
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Alisa Gravitz, executive director of the non-profit Co-op America,
commented, “In recent years, the increasing mainstream acceptance
of socially responsible investing has been driven by both the desire
of people to do good things . . . and strong performance numbers.
Now, there is indisputable and long-term evidence that socially
responsible investing delivers the kind of results that all investors
expect of their mutual funds. When you combine this impressive performance
with community investing, shareholder activism and other activities,
you have a very compelling case for socially responsible investing.”
Highlights
SIF assessed the performance of socially responsible mutual funds
through mid-year 2001 by looking at broader data from three sources:
Morningstar, Lipper Analytical Services and Wiesenberger. Major
findings of its analysis were as follows:
• Two out of three large socially responsible funds get top
ratings. Of the 15 socially screened funds with more than $100 million
in assets receiving top rankings from either or both Lipper and
Morningstar, 10 earned an “A” or “B” ranking
from Lipper, based on one- and/or three-year total returns in its
investment categories. Seven received either four- or five-star
ratings from Morningstar. In addition, Wiesenberger placed nine
of the 15 largest social funds in the top quartile of its investment
categories based on three-year performance records, five of which
ranked in the top 10 percent.
• Over half of the broader universe of social funds earn highest
ratings. Of the 46 socially screened funds with a three-year performance
record tracked by the SIF, 25 received the highest marks from either
Lipper or Morningstar. According to the forum, 20 of the funds tracked
received an “A” or “B” ranking from Lipper based
on one- and/or three-year total returns within their investment
categories. A total of 18 screened funds garnered either four or
five stars from Morningstar for three-year risk-adjusted performance.
(The Lipper and Morningstar totals add up to more than 25, since
a number of the funds earned top rankings from both organizations.)
Both analyses are based on time periods ending June 30, 2001. Wiesenberger,
a third financial reporting organization, reported that 19 of the
46 socially and environmentally responsible mutual funds tracked
by the forum ranked in the top quartile for performance in their
respective categories for the three years ending June 30, 2001.
• Top-performing socially screened funds were found in key
asset classes. Based on data from Lipper, Morningstar and Wiesenberger,
socially and environmentally responsible mutual funds earned top
ratings in most major sectors. Socially screened funds were represented
in global/international, domestic equity, balanced and fixed-income
categories.
When reviewing the tables, note that these lists include all mutual
fund members of the SIF that are at least three years old. Its sources
include only “A” shares of those funds with multiple classes
of shares and does not include money market funds. Wall Street Journal/Lipper
Analytical Services Quarterly Mutual Fund Review, April 9, 2001—for
investment objectives, 12-month and three-year annual returns and
A-E rankings. Wiesenberger—for investment categories and category
ranking. Morningstar— for star ratings based on risk-adjusted
three-year performance. Social Investment Forum Mutual Fund Performance
Chart/Lipper—for assets/fund size.
Information provided by the Social Investment Forum, a Washington,
DC-based national non-profit membership association dedicated to promoting
the concept, practice and growth of socially and environmentally responsible
investing. The forum’s membership includes more than 500 social
investment practitioners and institutions. For more information, visit
www.socialinvest.org.
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