Socially responsible fund gets responsible

Lauren Young

Back in the 1990s, when I was a mere cub mutual fund reporter, I was assigned the task of covering socially responsible investing. My mandate was to break news on the world of funds that tries to make money for investors while doing good for the world. One of my early sources was Amy Domini--we met at the SRI in the Rockies conference in Jackson, Wyoming.

Domini is a pioneer in the SRI field. She's the co-founder of the Domini Social Equity Index, which is a kindler, gentler version of the S&P 500. It screens out polluters, companies that are bad to workers, and the like. Domini also runs a mutual fund company whose flagship fund tracks the index. The index (and, by virtue, the fund) did amazingly well in the late 1990s, but lately performance has been subpar.

Now Domini is asking shareholders to change the way the fund is managed, and it's attracted some attention. (In case you missed my breaking news story this week with more analysis, here's the link.) Domini wants to switch to a quant style that will be run by Wellington Management.

I think it's refreshing to see fund companies that are willing to shake up the system. In fact, just this week, Matthews Funds decided to close its popular Matthews Pacific Tiger Fund to new investors on June 8 to keep hot money from flowing into the fund.

Do you think fund companies are doing enough to look out for shareholders?

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