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Socially responsible funds attempt to match investors’ investments with their beliefs. Portfolio managers following such strategies seek out securities with favorable environmental, social and governance (ESG) ratings or otherwise invest in a manner to have an impact on gender and racial equality, pollution, renewable energy or similar types of issues.

Similar to the ETF First Cut, this month’s Mutual Fund First Cut seeks out funds classified as following a socially responsible approach to investing. The preliminary criteria identified nearly 60 no-load mutual funds that are widely available to individual investors. Many are too new to have one full year of return data and/or have very high expense ratios. A few ranked in the bottom of their category for one-year returns.

Eliminating funds without a full year of returns, those with A+ Investor grades of F for one-year annual return and those with high relative expense ratios reduced the number to 26. These socially responsible funds are shown in the table below. They are sorted from highest to lowest based on one-year performance.

A mix of categories is represented. Returns varied, though some of the passing funds have consistently outperformed their category peers. Unfortunately, it’s more challenging to avoid higher costs. Just six of the passing funds have expense ratios ranking in the lowest 40% for their respective categories. Unlike their ETF peers, nearly all these mutual funds are actively managed.

A+ Investor subscribers can see a current list of socially responsible stock mutual funds here.

Socially Responsible Mutual Funds With at Least One Year of Return Data
(Ranked by One-Year Return)

Fund	Ticker	Annualized Return (%)								Exp Ratio (%)	Min Init Purch ($)
		Annualized Return (%)										Category
		1-Yr	Grade	3-Yr	Grade	5-Yr	Grade	10-Yr	Grade			Category
Essex Environmental Opportunities Inv	EEOFX	82.6	A	24.0	A	—	—	—	—	1.26	2,000	Wld Sm/Mid Stk
Parnassus Endeavor Investor	PARWX	51.9	A	17.3	A	19.9	A	15.5	A	0.95	2,000	Large Value
New Alternatives Investor	NAEFX	51.7	C	28.7	A	22.1	A	12.0	B	1.33	3,500	Wld Sm/Mid Stk
Ariel Fund Investor	ARGFX	45.5	A	9.6	A	14.7	A	10.8	A	1.04	1,000	Mid-Cap Value
Goldman Sachs ESG Em Mkts Eq Inv	GEBNX	45.2	A	—	—	—	—	—	—	1.30	0	Divers Emg Mkts
Brown Advisory Sustainable Growth Inv	BIAWX	43.1	C	22.6	A	23.1	B	—	—	0.86	100	Large Growth
Amana Growth Investor	AMAGX	41.9	C	21.3	B	21.4	B	14.0	D	0.99	250	Large Growth
Pax Large Cap Fund Individual Investor	PAXLX	40.7	A	17.1	A	—	—	—	—	0.95	1,000	Large Blend
Parnassus Mid Cap Growth Investor	PARNX	39.3	D	15.3	F	16.5	F	13.1	D	0.84	2,000	Mid-Cap Growth
Fidelity Select Envir and Alt Engy Port	FSLEX	39.0	B	10.9	B	16.4	B	9.3	F	0.85	0	Industrials
Mesirow Financial Sm Cp Value Sust Inv	MSVVX	38.3	C	—	—	—	—	—	—	1.23	5,000	Small Value
Goldman Sachs International Eq ESG Inv	GIRNX	35.5	A	10.4	A	12.9	A	6.1	A	0.95	0	Foreign Lg Blend
Cavanal Hill Mid Cap Diverse Ldrsp Inv	APWVX	34.5	C	10.9	C	—	—	—	—	1.06	100	Mid-Cap Blend
Parnassus Core Equity Investor	PRBLX	34.2	B	17.2	A	16.5	B	13.6	A	0.86	2,000	Large Blend
American Century Sustainable Equity Inv	AFDIX	31.8	B	14.1	B	17.3	A	13.3	A	0.80	2,500	Large Blend
Vanguard Global ESG Select Stk Investor	VEIGX	31.0	C	—	—	—	—	—	—	0.58	3,000	Wld Large Stock
Touchstone Global ESG Equity Fd - Cl Y	TIQIX	30.5	C	9.1	C	13.0	C	10.5	B	0.90	2,500	Wld Large Stock
Touchstone International ESG Equity Y	TPYYX	30.5	A	8.8	A	12.2	A	9.4	A	0.90	2,500	Foreign Lg Blend
VALIC Company II U.S. Socially Rspnb	VCSRX	29.1	D	13.4	B	15.9	C	13.2	A	0.61	0	Large Blend
Pax ESG Beta Dividend Fund Indl Inv	PAXDX	28.4	D	11.7	D	—	—	—	—	0.90	1,000	Large Blend
Pax ESG Beta Quality Investor	PXWGX	28.3	D	11.9	C	14.4	D	10.9	F	0.90	1,000	Large Blend
USAA Sustainable World	USAWX	27.9	C	11.5	C	14.1	C	10.6	B	1.09	3,000	Wld Large Stock
Northern Global Sustainability Index I	NSRIX	27.3	D	11.5	C	14.1	C	9.5	C	0.30	2,500	Wld Large Stock
Pax Ellevate Glbl Women’s Ldrsp Inv	PXWEX	24.2	D	10.0	C	13.0	C	8.5	D	0.80	1,000	Wld Large Stock
Pax MSCI EAFE ESG Leaders Index Inv	PXINX	21.3	D	5.8	B	9.4	D	5.2	C	0.74	1,000	Foreign Lg Blend
VALIC Company I Intl Sclly Rspnb	VCSOX	21.0	D	7.7	A	12.0	A	9.1	A	0.63	0	Foreign Lg Blend
Source: AAII/Morningstar. Data as of 2/28/2021.

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