Socially Responsible Mutual Funds With The Worst And Best Returns by Christina Lavingia, Credito
Investors sometimes get a bad rap. Perceived as greedy individuals who will invest in any company — corrupt or otherwise — that boasts high returns, investors can be pegged as only having money on the mind. However, a recently emerging investment philosophy, known as socially responsible investing, is poised to challenge that opinion.
Socially responsible investors seek businesses and industries that meet strict investment standards and seem poised to generate strong returns, while also promoting societal improvements. Likewise, these investments avoid industries that go against health and sustainable objectives, such as the alcohol, gambling, firearms and nuclear industries, among others. A study published by Santa Clara University shows that socially responsible investments (SRI) don’t pay adversely for their niche focus. According to the study, “The return advantage of tilts toward stocks of companies with high social responsibility scores is largely offset by the return disadvantage that comes from the exclusion of stocks of ‘shunned’ companies.”
However, many funds still underperform relative to their benchmarks. As Morningstar reports: “… Social impact funds returned about 5 percent a year over the past 10 years, lagging behind large-cap funds by 1.1 percentage points a year,” according to Bloomberg.
While there are numerous socially responsible investments, a mutual fund provides individual investors with a way to diversify investments among a variety of bonds, stocks and other securities. But despite this diversification, there’s a big difference between the mutual funds that perform and those that offer paltry returns — or worse, negative returns.
Credio wanted to identify the 10 worst-performing and 10 top-returning mutual funds within the socially responsible investing category. To do this, we looked at funds that fit the SRI criteria that aligns with the environmental, social and corporate governance (ESG) standards, and meet the following benchmarks:
- Not leveraged
- Open to new investors
- Demonstrate at least three years of load-adjusted returns
- Have expense ratios lower than 1.5%
We start with the 10 worst-performing socially responsible mutual funds — listed from highest (No. 10) to lowest return (No. 1) — and follow with the 10 top-performing funds sorted from lowest (No. 10) to highest return (No. 1). For each fund, we include its five-year annualized return, net expense ratio, yield, net assets and investment style.
The Worst-Performing Socially Responsible Mutual Funds
Worst-performing socially responsible mutual funds #10: DOMAX – Domini International Social Equity A
Three-Year Annualized Return: 7.85%
Expense Ratio: 1.57%
Yield (TTM): 1.30%
Net Assets: $486 Million
Investment Style: Foreign Large Value
Worst-performing socially responsible mutual funds #9: MGAFX – Praxis Genesis Growth A
Three-Year Annualized Return: 7.50%
Expense Ratio: 1.21%
Yield (TTM): 1.84%
Net Assets: $51.2 Million
Investment Style: Aggressive Allocation
Worst-performing socially responsible mutual funds #8: PXIRX – Pax MSCI International ESG Idx R
Three-Year Annualized Return: 7.20%
Expense Ratio: 1.05%
Yield (TTM): 1.34%
Net Assets: $401 Million
Investment Style: Foreign Large Blend
Worst-performing socially responsible mutual funds #7: CWVIX – Calvert International Equity I
Three-Year Annualized Return: 6.84%
Expense Ratio: 0.97%
Yield (TTM): 1.16%
Net Assets: $363 Million
Investment Style: Foreign Large Value
Worst-performing socially responsible mutual funds #6: BNIEX – UBS International Sustainable Equity A
Three-Year Annualized Return: 6.55%
Expense Ratio: 1.25%
Yield (TTM): 1.22%
Net Assets: $26.6 Million
Investment Style: World Stock
Worst-performing socially responsible mutual funds #5: SSIAX – 1919 Socially Responsive Balanced A
Three-Year Annualized Return: 6.34%
Expense Ratio: 1.23%
Yield (TTM): 0.65%
Net Assets: $126 Million
Investment Style: Moderate Allocation
Worst-performing socially responsible mutual funds #4: MBAPX – Praxis Genesis Balanced A
Three-Year Annualized Return: 5.34%
Expense Ratio: 1.16%
Yield (TTM): 1.28%
Net Assets: $60.7 Million
Investment Style: Moderate Allocation
Worst-performing socially responsible mutual funds #3: MCONX – Praxis Genesis Conservative A
Three-Year Annualized Return: 2.36%
Expense Ratio: 1.14%
Yield (TTM): 1.70%
Net Assets: $20 Million
Investment Style: Conservative Allocation
Worst-performing socially responsible mutual funds #2: MPLAX – Praxis International Index A
Three-Year Annualized Return: 0.75%
Expense Ratio: 1.28%
Yield (TTM): 1.94%
Net Assets: $173 Million
Investment Style: Foreign Large Blend
Worst-performing socially responsible mutual funds #1: ARDFX – Ariel Discovery Investor
Three-Year Annualized Return: -0.45%
Expense Ratio: 1.25%
Yield (TTM): 0.00%
Net Assets: $33.4 Million
Investment Style: Small Blend
The Best-Performing Socially Responsible Mutual Funds
Best-performing socially responsible mutual funds #10: NBSLX – Neuberger Berman Socially Rspns
Three-Year Annualized Return: 16.13%
Expense Ratio: 0.68%
Yield (TTM): 0.84%
Net Assets: $2.33 Billion
Investment Style: Large Growth
Best-performing socially responsible mutual funds #9: PXSIX – Pax World Small-Cap
Three-Year Annualized Return: 16.42%
Expense Ratio: 0.99%
Yield (TTM): 0.53%
Net Assets: $520 Million
Investment Style: Small Blend
Best-performing socially responsible mutual funds #8: MMDEX – Praxis Growth Index
Three-Year Annualized Return: 17.06%
Expense Ratio: 0.42%
Yield (TTM): 1.02%
Net Assets: $192 Million
Investment Style: Large Growth
Best-performing socially responsible mutual funds #7: VCSRX – VALIC Company II Socially Responsible
Three-Year Annualized Return: 17.54%
Expense Ratio: 0.56%
Yield (TTM): 1.11%
Net Assets: $761 Million
Investment Style: Large Blend
Best-performing socially responsible mutual funds #6: CAAIX – Ariel Appreciation
Three-Year Annualized Return: 17.61%
Expense Ratio: 0.80%
Yield (TTM): 1.05%
Net Assets: $1.89 Billion
Investment Style: Mid-Cap Blend
Best-performing socially responsible mutual funds #5: CSVIX – Calvert Small-Cap
Three-Year Annualized Return: 17.86%
Expense Ratio: 0.92%
Yield (TTM): 0.29%
Net Assets: $265 Million
Investment Style: Small Blend
Best-performing socially responsible mutual funds #4: BAFWX – Brown Advisory Sustainable Growth
Three-Year Annualized Return: 18.16%
Expense Ratio: 0.75%
Yield (TTM): 0.00%
Net Assets: $303 Million
Investment Style: Large Growth
Best-performing socially responsible mutual funds #3: VFTSX – Vanguard FTSE Social Index
Three-Year Annualized Return: 18.40%
Expense Ratio: 0.25%
Yield (TTM): 2.21%
Net Assets: $2.02 Billion
Investment Style: Large Blend
Best-performing socially responsible mutual funds #2: ARAIX – Ariel Fund
Three-Year Annualized Return: 18.43%
Expense Ratio: 0.72%
Yield (TTM): 0.86%
Net Assets: $2.22 Billion
Investment Style: Mid-Cap Blend
Best-performing socially responsible mutual funds #1: PARWX – Parnassus Endeavor Fund
Three-Year Annualized Return: 18.47%
Expense Ratio: 0.84%
Yield (TTM): 1.64%
Net Assets: $1.4 Billion
Investment Style: Large Growth
