SRI funds fare better than most in first quarter

[MacDonald, G. Jeffrey. "Why ethical investors fared a little better this quarter,” The Christian Science Monitor, 7 April 2008.]

The Christian Science Monitor reports that while most funds took a dive, ethical approaches may have paid off for some:

"[S]ocially responsible (SR) funds, which bring moral values to bear on stock selection, on the whole suffered slightly less in the first quarter than their unscreened peers, according to data from fund tracker Morningstar. Domestic SR equity funds performed better than 56 percent of peer funds in their respective categories.

"'As a group, they did fairly well,' said David Kathman, a Morningstar mutual fund analyst with a subspecialty in SR funds.

"Mr. Kathman posits that large-cap SR funds may be benefiting from jittery investors' search for recession-proof stocks. Investors in the first quarter dumped cyclically sensitive stocks, such as steelmakers, defense contractors, and other heavy industries, which SR funds routinely avoid anyway. By being light on heavy industry, these SR funds may have lessened the consequences of investor flight to steadier sectors in a sluggish economy."

The Monitor is a particularly consistent observer of the SRI movement. In addition to regular story coverage, the paper also devotes an entire page to the subject that includes monthly video interviews.