"Green" mutual funds have flourished in the three decades since the August 8, 1971 launch of the Pax World Balanced Fund, the first mutual fund in the United States to use broad-based social and financial criteria for screening purposes. A report issued today by Pax World Funds cites extensive Wiesenberger tracking data showing, in part, that the assets of socially responsible mutual funds grew about five times faster than those of all other funds in the 30 years since 1971.
The report, entitled "Socially Responsible Mutual Funds in the U.S.: A Look Back… and Ahead" also notes that assets in socially and environmentally responsible funds reached the $100 billion milestone for the first time in mid-2001. The universe of 192 socially and environmentally responsible mutual funds tracked by Wiesenberger had total assets of $103 billion by the summer of 2001, the highest level ever. In addition to the Wiesenberger data, the Pax World Funds report includes the speculation of a worldwide team of futurists who were asked to outline the social and environmental issues that the investors of tomorrow are likely to face.
Pax World Funds President Thomas W. Grant said: "The world of today’s socially responsible mutual funds started in 1971 when no one was sending email, Federal Express and Microsoft were yet to open their doors, a gallon of gasoline cost 36 cents and there were fewer than 200 mutual funds of any kind in existence. From the vantage point of 30 years later, it is apparent that socially and environmentally responsible mutual funds not only are here to stay, but that they are likely to undergo considerable expansion in the coming years. Pax World Funds always has been part of that picture and we will remain so in the future."
"Socially responsible mutual funds have earned the respect of hundreds of thousands of new investors in the past decade," commented Steve Schueth, spokesperson for the Social Investment Forum and president of First Affirmative Financial Network, a nationwide network of investment professionals who specialize in serving socially conscious investors. "With almost 200 socially and environmentally responsible funds in existence, a high quality portfolio can be developed to meet the needs of almost every socially aware investor. Today, socially responsible mutual funds are widely accepted as value-added investing tools."
UNDERSTANDING THE RISE OF SOCIALLY RESPONSIBLE INVESTING
To mark the 30th anniversary of socially and environmentally responsible mutual funds in America, Pax World Funds commissioned Wiesenberger, a division of Thomson Financial, to track the rise of the industry. The key findings from the Wiesenberger data were as follows:
* Assets of socially responsible mutual funds grew about five times faster than those of all other funds. From the modest $150 million in socially and environmentally responsible mutual fund assets in 1971, socially responsible mutual funds reached a record $103.0 billion by mid-2001. This is a growth rate of slightly more than 68 times (68,581 percent) compared with more than 13.5 times (13,685 percent) for the assets of all other mutual funds, which rose from $50.1 billion in 1971 to $6.9 trillion as of mid-2001.
* The ranks of socially responsible mutual funds grew more than twice as rapidly as those of all other funds. From the founding of the Pax World Fund in 1971 to the emergence of a total of 192 such funds in mid-2001, the number of socially responsible mutual funds now tracked by Wiesenberger has grown by 9,500 percent (from 2 in 1971 to 192 in mid-2001). This compares to a 4,074 percent increase for all other funds in the same period (from 280 in 1971 to 11,688 in mid-2001).
* The surge in socially responsible mutual fund assets has remained relatively close to those of all other funds in recent years. Even with the unprecedented growth of the last decade in the mutual fund world, the growth rate in the assets of socially responsible and all other funds remained relatively close in the last 10 years (392 percent versus 410 percent), according to Wiesenberger.
Assets in socially and environmentally responsible mutual funds reached the $100 billion milestone for the first time in 2001. The Wiesenberger universe of socially and environmentally responsible mutual funds had total assets of $103 billion in the first half of 2001, the highest level ever.
* The total assets of socially responsible mutual funds could rise to $278.1 billion in just ten years. That level, which is based on the growth rate of the last 30 years, would mean that, in one short decade, socially responsible mutual fund assets would grow to become 1.5 times larger than the amount it took the industry 30 years to accumulate.