Socially Responsible Funds

Socially responsible or conscious funds are mutual funds that are more defined by what they don't invest in rather than what they do invest in. Socially responsible funds choose not to invest in companies that engage in activities that go against a particular social cause, political ideology or value system.

Examples of the types of companies that these funds will not buy stock in is drug companies that conduct tests on animals, tobacco companies, or gun manufacturers.

Socially responsible funds choose to invest in various kinds of companies, including some that would be found in growth funds and balanced funds. If you want to invest in socially responsible funds you should be certain to use the same criteria you would for any other investment vehicles when choosing among them. This means assessing the type of risk and return involved and whether it's appropriate for your age and stage of life, as well as making sure the fund is diversified and you've done all of your homework.