|
OVER 70 PERCENT OF LARGEST SOCIALLY
RESPONSIBLE
MUTUAL FUNDS GOT TOP MARKS FROM MORNINGSTAR, LIPPER IN
2003
Analysis of Expense Ratios Finds
SRI Funds Neither More or Less Costly Than Unscreened
Funds Of Similar Type.
WASHINGTON, D.C.///January
27, 2004///As the markets started moving up
again after a full three-year stock slump, well over two
thirds (71 percent) of the largest socially and
environmentally responsible mutual funds in the United
States earned top the highest possible ratings through
the end of 2003 from Morningstar and Lipper, according
to data released today by the nonprofit Social
Investment Forum.
Of the 21 screened funds tracked by the Social
Investment Forum with $100 million or more in assets, 15
received top performance marks from one or both of the
tracking firms through 2003. A full 62 percent (33 funds
or 62 percent) of the total universe of 53 socially
screened funds tracked by Lipper and Morningstar
received top marks from one or both of the firms. Over
37 percent of the screened funds tracked by the Forum
received 4 or 5 stars from Morningstar versus 32.5
percent of the general mutual fund universe. In another
indicator of competitiveness, a 2003 survey of socially
responsible mutual funds found that average expenses are
similar to those charged for unscreened funds, and, in
some cases, are lower.
Social Investment Forum President Tim Smith said:
"The new data illustrate that socially
responsible mutual funds continue to stand tall and
outperform the universe of mutual funds when it comes to
earning Morningstar ratings. With the markets
rebounding, social funds are in the front ranks,
receiving high marks from the tracking firms. Coupled
with expanding shareholder advocacy for corporate
reforms on social and governance issues, the performance
of socially responsible funds is making them an even
more powerful force for investors."
Alisa Gravitz, executive director of Co-op America, a
non-profit investor education organization, said:
"When you combine competitive performance with
the good ethical conduct that is even more attractive to
investors in the wake of the ongoing corporate and
mutual fund scandals, there is a compelling case to be
made for people taking another look at socially
responsible mutual funds."
HIGHLIGHTS OF NEW DATA ON SCREENED FUND
PERFORMANCE
The Forum assessed the performance of socially
responsible mutual funds through the end of 2003 by
looking at comprehensive data from two sources: Lipper,
Inc. and Morningstar. Major findings of the Forum's
analysis were as follows:
- A total of 62 percent of the full universe of
social funds earn highest ratings. Of the 53
socially screened funds with a three-year
performance record tracked by the Social Investment
Forum, 33 (62 percent) received the highest marks
from either Lipper or Morningstar. According to the
Forum, 26 (49 percent) of the funds tracked received
an "A" or "B" ranking from Lipper based on one-
and/or three-year total returns within their
investment categories. A total of 20 screened funds
(37 percent) earned either four or five stars from
Morningstar for at least three-year risk-adjusted
performance. A number of the funds earned top
rankings from both organizations. Both the Lipper
and Morningstar analyses are based on time periods
ending December 31, 2003.
- Well over two out of three of the largest
socially responsible funds get top ratings. Of the
socially screened funds with more than $100 million
in assets, 15 of 21 (71 percent) received top
rankings from either or both Lipper and Morningstar.
A total of 12 earned an "A" or "B" ranking from
Lipper, based on one- and/or three-year total
returns in their investment categories. Nine
received either four- or five-star ratings from
Morningstar for three-year risk adjusted
performance.
- Socially responsible indexes were neck-and-neck
with the S&P 500 both during 2003 and on a total
returns basis for 10 years. For the year ending
December 31, 2003, the Domini 400 Social Index (DSI
400) showed a gain of 28.47 percent, while the S&P
500 rose 28.66 percent over the same period. For the
10-year period ending December 31, 2003, the DSI 400
gained 11.86 percent while the S&P posted an 11.07
percent gain.
- Comparing all share classes of SRI funds by
investment type to all share classes for the total
market, and only including those investment
categories with five or more SRI funds, an analysis
of SRI expense ratios finds that SRI funds are
neither more or less costly than other funds of
similar type. Fifty percent of SRI funds by
investment category are less costly than the whole
market, even though 60 percent of SRI investment
categories have lower average net assets than the
market. This fact further underscores the
competitiveness of SRI mutual funds expenses, as
funds with lower assets often tend to have higher
expenditures.
|
