Just because you want to invest with your heart doesn't mean you should risk losing your shirt. SRI funds can perform just as well or even better than their non-socially screened peers. (For example,e Amana Trust Growth (AMAGX) ranks No. 1 and 2 in its fund category over the trailing 10- and 15-year periods through April 2011.) But there are some poorly performing SRI funds out there, and you should avoid those as you would any bad fund.

Also, find out how expensive the fund is. You'll probably have to pay more for your socially screened funds. That's because such funds are typically smaller than their nonscreened peers and smaller funds tend to have higher expenses. Higher expenses may also reflect the additional research required to determine whether or not a company passes the fund's social screens.

Next: How Do These Funds Work in My Portfolio? >>