social investing

Ethical Investing

Any investment philosophy that recommends investment decisions based upon a decision's ethical implications for individuals and companies. For example, an individual may have a moral objection to smoking, and therefore refrain from investing in tobacco companies. Ethical investing may be both positive and negative; that is, it may inform where an individual makes investments (e.g. in environmentally friendly companies) and where he/she does not make investments (e.g. in arms manufacturers). Some mutual funds, and even whole subdivisions of companies, are dedicated to promoting ethical investing. See also: Green fund, Islamic finance.

social investing

Limiting one's investment alternatives to securities of firms whose products or actions are considered socially acceptable. For example, an investment manager might decide to eliminate from consideration the securities of all firms engaged in the manufacture of tobacco or liquor products. Also called ethical investing. See also green investing.
Investing in socially responsible mutual funds: Is performance usually sacrificed for the sake of ideology?

No, it appears that mixing money and ethics is not lethal to your financial health. One indication is that the Domini 400 Social Index, a broad-based equity index of socially screened corporations, showed a five-year return of 18.08% versus 18.33% for the Standard & Poor's 500 (for the period ending 2000). Perhaps more important, as socially responsible or ethical investing has become a growing factor in the mutual fund business, this sector's performance has come to mirror the rest of the mutual fund industry, dominated by the talents (or ineptitude) of individual money managers and market sentiment toward a particular investment style. No question, investors now have plenty of choice among socially responsible mutual funds, ranging from money market funds to international equities. Socially oriented mutual funds typically use a set of financial and social concerns to exclude certain kinds of investments: no defense companies, tobacco sellers, or gambling enterprises, for instance. Other ethical investing funds generate additional criteria for picking companies that further valued social goals, such as environmentally conscious firms or companies with strong community relations.

Christopher Farrell, Economics Editor, Minnesota Public Radio, heard nationally on Sound Money®
References in periodicals archive ?
Wesley's sermon "The Use of Money" outlined his basic tenets of social investing - not to harm your neighbour through your business practices and to avoid industries which damaged the health of workers.
Neither fund is focused on social investing and both have relatively low sustainability ratings from Morningstar, but they do have a social dimension.
Now, social investing is moving more toward trying to have positive influences," says James Neill, a senior consultant in the Pittsburgh office of Willis Towers Watson.
Support the Liberti KickStarter campaign, a one-of-a kind made in America model blending the best of business and social investing impact, employing resettled refugees living right here in our own backyards.
During Financial Literacy month, consumers can participate in educational programs that include ways to make smarter money decisions, identity theft protection, rebuilding and raising credit scores, getting financially ready for college and social investing.
6-7: Global leaders in social investing and fundraising will be gathering in Aspen, CO for the Aspen Investment Forum.
This kind of social investing will continue to grow in India.
It said that the acquisition of SocialPicks will accelerate the adoption of its social investing tools.
Aite also found that social investing sites play little role in advisers' use of social media.
The authors posit that it may not be surprising that social investing websites are more successful at predicting abnormally negative future stock performance than they are at predicting abnormally positive future stock performance, because acting on negative information about the prospects for a stock can be more costly and difficult than acting on positive information about the prospects for a stock.
Abraaj Capital has refined its sustainability initiatives to include social investing, transparency and good governance, and environmental stewardship as pillars of its strategy.

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