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Funds 304: Socially Responsible Investing Funds

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1.
Shareholder activism is a key for _______.
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Some SRI funds. Some SRI funds engage in shareholder activism to reform companies. Others simply shun those companies.
2.
Which of the following investments would a socially responsible investing fund most likely accept in its portfolio?
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A grape grower. Of the four choices, this one is the least objectionable. (Where the grapes end up is, of course, another matter.)
3.
Because of their ethical criteria, socially responsible funds outperform the average mutual fund.
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False. The results are not uniform. While some funds do outperform the average, there are many that either match it or do worse.
4.
A socially responsible investing fund _______.
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Might own an oil company. Although generally considered to be unfriendly to the environment, an oil company could be held in an environmentally concerned SRI fund if that fund takes a relative approach. That's why it's important to understand how a fund's screens work.
5.
Socially responsible funds _______.
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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.