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1.
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.
2.
All socially responsible investing funds use shareholder activism.
False. Some SRI funds use shareholder activism to reform companies, but others just avoid them entirely.
3.
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.
4.
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.
5.
People who choose socially responsible investing funds are motivated by the same issues.
False. The issues that drive SRI investors vary greatly. For example, one investor may place great value on diversity in the workplace, while another may not.
