Very broadly, socially responsible investing weaves values-based, nonfinancial criteria into the investment process. But that definition is pretty broad. The SRI label can apply to various, even contradictory, investing strategies. Those looking to invest according to their values needn't despair, though. Despite the complexity, there are really just five basic questions you need to answer when looking for an SRI fund.
Social screens differ significantly from fund family to fund family.
But before you get bogged down in reams of information about different SRI funds, examine your own values. Once you've identified the issues that mean the most, decide if you'd like a religious or a secular fund. They usually avoid nuclear power firms and alcohol, tobacco, and weapons makers. A growing number of religious offerings cater to an assortment of denominations. The majority of religious funds avoid alcohol, gambling, and pornography stocks, but their screens vary widely in other ways.