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Socially Responsible Mutual Funds With the Worst and Best Returns

Posted on January 5, 2016 by Christina Lavingia Shutterstock

Investors sometimes get a bad rap. Perceived as greedy individuals who will invest in any company — corrupt or otherwise — that boasts high returns, investors can be pegged as only having money on the mind. However, a recently emerging investment philosophy, known as socially responsible investing, is poised to challenge that opinion.

Socially responsible investors seek businesses and industries that meet strict investment standards and seem poised to generate strong returns, while also promoting societal improvements. Likewise, these investments avoid industries that go against health and sustainable objectives, such as the alcohol, gambling, firearms and nuclear industries, among others. A study published by Santa Clara University shows that socially responsible investments (SRI) don't pay adversely for their niche focus. According to the study, "The return advantage of tilts toward stocks of companies with high social responsibility scores is largely offset by the return disadvantage that comes from the exclusion of stocks of ‘shunned’ companies."

However, many funds still underperform relative to their benchmarks. As Morningstar reports: "... Social impact funds returned about 5 percent a year over the past 10 years, lagging behind large-cap funds by 1.1 percentage points a year," according to Bloomberg.

While there are numerous socially responsible investments, a mutual fund provides individual investors with a way to diversify investments among a variety of bonds, stocks and other securities. But despite this diversification, there's a big difference between the mutual funds that perform and those that offer paltry returns — or worse, negative returns.

Credio wanted to identify the 10 worst-performing and 10 top-returning mutual funds within the socially responsible investing category. To do this, we looked at funds that fit the SRI criteria that aligns with the environmental, social and corporate governance (ESG) standards, and meet the following benchmarks:

  • Not leveraged
  • Open to new investors
  • Demonstrate at least three years of load-adjusted returns
  • Have expense ratios lower than 1.5%

We start with the 10 worst-performing socially responsible mutual funds — listed from highest (No. 10) to lowest return (No. 1) — and follow with the 10 top-performing funds sorted from lowest (No. 10) to highest return (No. 1). For each fund, we include its five-year annualized return, net expense ratio, yield, net assets and investment style.

#10. DOMAX - Domini International Social Equity A

Three-Year Annualized Return: 7.85%
Expense Ratio: 1.57%
Yield (TTM): 1.30%
Net Assets: $486 Million
Investment Style: Foreign Large Value

#9. MGAFX - Praxis Genesis Growth A

Three-Year Annualized Return: 7.50%
Expense Ratio: 1.21%
Yield (TTM): 1.84%
Net Assets: $51.2 Million
Investment Style: Aggressive Allocation

#8. PXIRX - Pax MSCI International ESG Idx R

Three-Year Annualized Return: 7.20%
Expense Ratio: 1.05%
Yield (TTM): 1.34%
Net Assets: $401 Million
Investment Style: Foreign Large Blend

#7. CWVIX - Calvert International Equity I

Three-Year Annualized Return: 6.84%
Expense Ratio: 0.97%
Yield (TTM): 1.16%
Net Assets: $363 Million
Investment Style: Foreign Large Value

#6. BNIEX - UBS International Sustainable Equity A

Three-Year Annualized Return: 6.55%
Expense Ratio: 1.25%
Yield (TTM): 1.22%
Net Assets: $26.6 Million
Investment Style: World Stock

#5. SSIAX - 1919 Socially Responsive Balanced A

Three-Year Annualized Return: 6.34%
Expense Ratio: 1.23%
Yield (TTM): 0.65%
Net Assets: $126 Million
Investment Style: Moderate Allocation

#4. MBAPX - Praxis Genesis Balanced A

Three-Year Annualized Return: 5.34%
Expense Ratio: 1.16%
Yield (TTM): 1.28%
Net Assets: $60.7 Million
Investment Style: Moderate Allocation

#3. MCONX - Praxis Genesis Conservative A

Three-Year Annualized Return: 2.36%
Expense Ratio: 1.14%
Yield (TTM): 1.70%
Net Assets: $20 Million
Investment Style: Conservative Allocation

#2. MPLAX - Praxis International Index A

Three-Year Annualized Return: 0.75%
Expense Ratio: 1.28%
Yield (TTM): 1.94%
Net Assets: $173 Million
Investment Style: Foreign Large Blend

#1. ARDFX - Ariel Discovery Investor

Three-Year Annualized Return: -0.45%
Expense Ratio: 1.25%
Yield (TTM): 0.00%
Net Assets: $33.4 Million
Investment Style: Small Blend

#10. NBSLX - Neuberger Berman Socially Responsive

Three-Year Annualized Return: 16.13%
Expense Ratio: 0.68%
Yield (TTM): 0.84%
Net Assets: $2.33 Billion
Investment Style: Large Growth

#9. PXSIX - Pax World Small-Cap

Three-Year Annualized Return: 16.42%
Expense Ratio: 0.99%
Yield (TTM): 0.53%
Net Assets: $520 Million
Investment Style: Small Blend

#8. MMDEX - Praxis Growth Index

Three-Year Annualized Return: 17.06%
Expense Ratio: 0.42%
Yield (TTM): 1.02%
Net Assets: $192 Million
Investment Style: Large Growth

#7. VCSRX - VALIC Company II Socially Responsible

Three-Year Annualized Return: 17.54%
Expense Ratio: 0.56%
Yield (TTM): 1.11%
Net Assets: $761 Million
Investment Style: Large Blend

#6. CAAIX - Ariel Appreciation

Three-Year Annualized Return: 17.61%
Expense Ratio: 0.80%
Yield (TTM): 1.05%
Net Assets: $1.89 Billion
Investment Style: Mid-Cap Blend

#5. CSVIX - Calvert Small-Cap

Three-Year Annualized Return: 17.86%
Expense Ratio: 0.92%
Yield (TTM): 0.29%
Net Assets: $265 Million
Investment Style: Small Blend

#4. BAFWX - Brown Advisory Sustainable Growth

Three-Year Annualized Return: 18.16%
Expense Ratio: 0.75%
Yield (TTM): 0.00%
Net Assets: $303 Million
Investment Style: Large Growth

#3. VFTSX - Vanguard FTSE Social Index

Three-Year Annualized Return: 18.40%
Expense Ratio: 0.25%
Yield (TTM): 2.21%
Net Assets: $2.02 Billion
Investment Style: Large Blend

#2. ARAIX - Ariel Fund

Three-Year Annualized Return: 18.43%
Expense Ratio: 0.72%
Yield (TTM): 0.86%
Net Assets: $2.22 Billion
Investment Style: Mid-Cap Blend

#1. PARWX - Parnassus Endeavor Fund

Three-Year Annualized Return: 18.47%
Expense Ratio: 0.84%
Yield (TTM): 1.64%
Net Assets: $1.4 Billion
Investment Style: Large Growth

Compare Mutual Funds on Credio


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