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May 02, 2003
The Benefits and Obstacles of Switching to Socially Responsible Investing
    by William Baue

One investor's story of the process of shifting mainstream investments into socially responsible investment mutual funds (part one of a two-part article).


Social investors hold values that defy exact definition. They believe in the importance of a wide range of issues that include human rights, respect for the environment, peace, and equality. Many people, of course, hold these same values. However, they may not see a connection between their values and their investments. Prioritizing one requires sacrificing the other, they presume.

Until recently, that was the case for Brian P. Fisher of Philadelphia.

"I was just your average regular normal American," Mr. Fisher told SocialFunds.com. "I worked a job--I had been facility manager at a fitness center at Temple University for some years. I really got into the stock market, investing in mutual funds and 403(b)s and 401(k)s. It wasn't that long before I had almost $100,000 in IRAs."

"It's not like I was this big spender, totally immersed in material things," he said. "I had a BMW and nice furnishings--they didn't identify me or own me, but I was certainly accumulating wealth."

He decided to change the direction of his life, so he quit his job at Temple and volunteered with AmeriCorps, where he rose in the ranks. He is currently taking a year sabbatical to do social work with disadvantaged and court adjudicated youth.

"I kind of took a leap of faith," Mr. Fisher said. "I had read one of these self-help books about simplicity: Simple Living: The Path to Joy and Freedom by Jose Hobday. It had some obvious suggestions: cut your wardrobe in half, condense all your financial holdings, which I had already done by putting all my investments, including my checking account, under one roof at Fidelity."

Simplifying his life also inspired him to evaluate the implications of his actions.

"I honed in on specific impacts: when I bought gasoline, I asked myself who I was supporting," he said. "Is this oil company trampling on human rights and the earth, or does it have good social and environmental policies?"

The political tensions of this year pushed his thinking even further.

"When the Iraq War was about to break out, I was against the war and for peace," Mr. Fisher said. "I was going to these rallies, and a lot of the speakers focused on companies that would exploit war, such as Halliburton (ticker: HAL). I had a revelation that I was being hypocritical, marching for peace while investing in mutual funds that hold these companies profiting from the war."

"As well, I realized I might not be buying gas at the pump from companies with bad environmental records, but I was heavily invested in ExxonMobil," he added.

In January, he pledged to evaluate what companies his mutual funds were invested in and potentially shift his holdings.

"There were definitely roadblocks," Mr. Fisher said. "When I initially committed to the idea of matching my investments with my values, I called Fidelity to ask if they had a service for identifying all the socially and environmentally responsible funds they offer. They said no."

"I was shocked," he said. "Here's the largest brokerage house in the world, which offers more services than I could list, yet they don't offer this one simple service that I thought was a no-brainer. They said I'd have to find out on my own what funds I might want to invest in, and then they could see if those funds were on Fidelity's network list."

Mr. Fisher surfed the web, asked friends, and browsed magazines and books, but had little luck finding what he was looking for.

"About three weeks ago, I recommitted myself and went back to the web," Mr. Fisher said. "I did a search on Yahoo. Going through the first five listings, none really grabbed me until I got to SocialFunds.com. When I clicked on it, it appealed to me immediately because it was simple and concise, and the legwork was done for me."

"The funds are profiled there, the performance records are listed, there's information about companies," he said. "I mailed away for the free Mutual Fund Kit, and when I received the guide and the rap sheet with information on all of the socially and environmentally responsible mutual funds, I thought, this is exactly what I need."

"The startler that just knocked me flat on my back was that the performance of SRI funds was every bit as good if not better than regular mutual funds that don't have any socially or environmentally responsible thinking," Mr. Fisher said. "I went into this thinking, I'll support socially and environmentally friendly companies knowing that I'm going to take a loss. So what a relief and benefit it was to see that I can invest in great companies without having to bite the bullet."

Part Two: Brian's choices of SRI mutual funds and his reflections on SRI.


Do you have a social investing story to tell? Please send it to us via the feedback tool on the left!

 

 
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