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Fund Spy

SRI Fans Have Plenty of Good Core Options

But it's still tough to build a good all-SRI fund portfolio.

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The socially responsible investing (SRI) universe has expanded a lot over the past decade. While there were just 25 SRI funds 10 years ago--and 42 such offerings five years ago--there now are 60 SRI funds. These numbers only include funds that use a sizable and strict set of secular screens; offerings that rely on a limited number of secular screens, such as funds that only avoid tobacco stocks and alcohol stocks, are excluded, as are funds that employ religious screens.

But SRI investors still face a shortage of good supplemental choices. The SRI universe is still heavily skewed toward types of funds that are designed to be core holdings: 36 of the 60 strict secular-screened funds are domestic large-cap or allocation funds, in fact, whereas only 15 of these funds are mid-cap, small-cap, or overseas offerings. And though several of the large-cap-oriented funds are solid offerings--and a few are good ones--most of the smaller-cap and international offerings are unattractive for one reason or another.

The SRI Large-Cap Funds Are Solid Overall
The 12 large-growth SRI funds stack up fairly well relative to the competition. Though they've lagged the category norm a bit over the past three years, they've outgained the typical large-growth offering over the trailing five- and 10-year periods and suffered slightly less volatility over time.

William Samuel Rocco does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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