Before getting bogged down in reams of information about different SRI funds, examine your own values. Which issues are driving you to become a socially conscious investor? Do you simply want to avoid investing in alcohol and tobacco stocks? Are you especially concerned about the environment? Are issues of workplace diversity critical to you? Do you want to avoid weapons makers?
Once you've identified the issues that mean the most to you, decide if you'd like a religious or a secular fund. The largest and best-known SRI funds, such as Pax World Balanced (PAXWX), TIAA-CREF Social Choice Equity (TISCX), and the Calvert funds, are secular funds. They usually avoid weapons makers and nuclear-power, alcohol, and tobacco firms. In addition, many secular SRI funds look for those companies with the best environmental, human-rights, and workplace-diversity records.
A growing number of religious offerings cater to an assortment of denominations. The Praxis funds are designed for Mennonite investors; the Ave Maria and Aquinas funds serve Catholics; the Amana funds were created for Islamic investors; and the Timothy funds serve conservative Christians. The majority of religious funds avoid alcohol, gambling, and pornography stocks, but their screens vary widely in other ways. For example, because of an Islamic principle against usury (interest), the Amana funds don't invest in bonds or many financial stocks.
How Does a Fund Screen Its Investments? >>