Socially Conscious Mutual Fund

Socially conscious mutual fund

A mutual fund that does not invest in companies that have interests in socially unacceptable markets or produce harmful products or by-products, such as high levels of environmental pollution.

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Socially Conscious Mutual Fund

A mutual fund in which the asset managers make investment decisions based upon some ethical code. A socially conscious mutual fund is marketed to investors who may have moral objections to certain investment vehicles or companies. For example, an individual may have a moral objection to smoking and may therefore buy shares in a mutual fund that refrains from investing in tobacco companies. Socially conscious mutual funds may have both positive and negative guidelines; that is, a fund's ethics may inform where it makes investments (e.g. in environmentally friendly companies) and where it does not (e.g. in arms manufacturers). See also: Green fund, Islamic finance.