US investors leaning toward SRI funds

US investors are becoming increasingly interested in socially responsible investment (SRI) mutual funds and think they encourage corporations to be more protective of the environment, a recent survey has showed.

SRI firm Calvert, based in Bethesda, Maryland, commissioned the survey from The Segmentation Company, a Chapel Hill, North Carolina, division of marketing company Yankelovich. In December 2005, the polling company questioned 800 individuals who own at least one stock or bond mutual fund, and have purchased mutual fund shares outside of employee retirement plans.

It found that 55% of the respondents considered it "extremely" or "very important" that SRI funds try to influence corporations. And most of the investors thought the funds can accomplish that, with 59% saying they could persuade corporations to become more environmentally friendly. Similar percentages of respondents perceived influence in corporate honesty, wages and product safety.

Further, most investors said that companies that operate with greater social responsibility carry less risk (55%) and deliver better returns (52%).

Among investors that do not own SRI funds, 54% said they would be interested in owning them, which represents an increase from 40% in 1999. The figure rose to 87% if investors knew the return would be the same as other funds. Despite those positive views, though, only 39% of respondents were aware of SRI funds. Among those aware of the funds, 29% have invested in them.

The low level of awareness shows an opportunity for growth, said Calvert senior vice president Reggie Stanley during a 7 March news conference.

Hal Quinley, vice president at Segmentation, said interest in SRI began with tobacco issues, then expanded to corporate integrity and has now spread to environmental issues. Paul Ellis, a financial advisor with Ameriprise Financial, Fishkill, New York, said his clients have seen "consistent and competitive performance" with SRI funds.

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