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1.
All socially responsible investing funds use shareholder activism.
False. Some SRI funds use shareholder activism to reform companies, but others just avoid them entirely.
2.
The average socially responsible investing fund's costs are _______.
More than the average non-SRI fund's. These funds are often smaller than non-SRI funds and therefore don't enjoy the same economies of scale. Further, some SRI funds charge higher management fees, taking into account the added costs of SRI screening and research.
3.
There is a religious objection to investments that pay interest.
True. Islamic investing forbids the paying of interest, and therefore many Islamic mutual funds do not invest in bonds.
4.
Socially responsible funds _______.
May screen companies on different values; there's no one SRI approach. Although most SRI funds shun tobacco, alcohol, and nuclear-weapons manufacturers, they can screen on dozens of different criteria. There's no single approach.
5.
A socially responsible investing fund might engage in shareholder activism within companies it owns because _______.
It wants to change policies it disagrees with. A perfectly ethical company is a rarity; thus, a SRI fund might use activism to mold its companies to its wishes.
