Socially Responsible Mutual Fund Assets Increase Five Fold Over Other Funds

by Philip Morton, Investors Offshore.com

22 August 2001

A Wiesenberger report commissioned by Pax World Funds to mark the 30th anniversary of socially and environmentally responsible mutual funds in America has revealed that 'green' mutual funds have flourished five times faster than those of all other funds in the three decades since the 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.

According to the report, entitled "Socially Responsible Mutual Funds in the U.S.: A Look Back... and Ahead", assets in socially and environmentally responsible funds reached the $100 billion milestone for the first time in mid-2001.

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.'

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, agreed, saying: 'Socially responsible mutual funds have earned the respect of hundreds of thousands of new investors in the past decade, 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.'

Some of the key findings of the Wiesenberger report are as follows:

• 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 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.

The full Pax World Funds Report is available at http://www.paxfund.com/30th.html

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