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Rating:Social Funds Show Strong Results Not Rated 3.0 Email Routing List Email & Route  Print Print
Thursday, April 18, 2002

NICHE REPORT
Social Funds Show Strong Results

by: Sean Hanna, Editor in Chief

The Social Investment Forum is touting the performance of socially responsible funds, but the performance message is not yet altering the economics of this fund niche.

The nonprofit trade group points out that 14 of 18 screened funds now receive top ratings from either Morningstar or Lipper. Still, despite the recent performance, these funds have yet to become hot with investors. Only two of the funds tracked by the group have more than $1 billion in assets. Those are the Domini Social index fund ($1.20 billion) and Pax World ($1.17 billion).

The other leaders in the segment are also turning in results that may support a niche effort but are not strong enough to go main stream. Calvert Funds, with a parent company to support its efforts, has only $566 million in its largest fund, according to the group. Chicago-based Ariel, a firm focused on minority investments, has $1.45 billion in its two funds.

Altogether the 46 funds hold $8.44 billion in assets. That leaves the average fund with $183 million in assets, not enough to be profitable at the level diversified asset managers need to support a product. It is also not enough of an asset base to support a mature sales, distribution and marketing effort for the segment.

Yet the average hides even starker problems for the segment. The median assets in these funds are just $51.5 million (half of social funds hold less than this amount).

At that level these funds, with a couple exceptions, remain caught in the "mom-and-pop" stage of business development.

Equity Funds Inv. Obj.* Assets in millions 1-Year Average Lipper 3-Year Average Lipper Morningstar Rating
American Trust Allegiance
GD*
27
-27.01
-3.78
2
Aquinas Growth
XG
61
-16.1A
2.0B
4
Aquinas Value
EI
45
-6.3C
-2.2E
2
Aquinas Small Cap
SC
6
-10.83
-1.44
2
Ariel Appreciation:A
MV
707
16.2B
9.9D
4
Ariel Fund 
MV
538
14.2D
11.5D
4
Bridgeway Aggressive Growth
XG
287
-11.2A
30.6A
5
Bridgeway Ultra Small Company
SC
54
34A
25.4A
5
Bridgeway Ultra Large 35 Index
GD*
6
-9.06
0.2
3
Bridgeway Ultra Small Index
SCG*
24
23.98
17.96
5
Calvert Capital Accumulation: A
MG
126
-12.9B
.6D
3
Calvert Social Invest. Equity Enhanced
LC
34
-10.2A
.2B
3
Calvert New Vision Small Cap A
SC
96
7.6C
13.4B
4
Calvert Social Equity:A
XC
298
.7A
11.4A
3
Citizens Emerging Growth
XG
231
-33E
3.8C
4
Citizens Core Growth
LG
417
-18.2B
-6.2D
3
Delaware - Social Awareness A
XC
26
-10.6C
-3.3E
2
DEVCAP Shared Return
GD*
17
-13.06
-1.71
4
Domini Social Equity: Retail
LC
1207
-12.8C
-3.1D
4
Dreyfus Premier Third Century:Z
LG
850
-23.7C
-4.7D
2
Flex Funds-Total Return Utilities
UT
29
-14.6A
7.3A
4
Flex Partners-Utility
UTL*
3
-14.94
2.25
NR
Green Century Equity
LC
34
-13.3C
-3.7D
3
MMA Praxis Core Stock Fund: B
XC
139
-8.5A
.5B
3
Meyers Pride Value (Citizen's Value)
XV
18
13.4A
13.3A
5
Neuberger&Berman Socially Responsible: In
XV
85
-2.6C
1.3D
3
New Alternatives Fund
SE
47
-12.4E
13.0A
2
Noah Fund
LG
12
-23.3C
-10.4E
2
Parnassus Fund
MV
400
7.8A
17.6A
5
Parnassus Equity Income Fund
EI
77
10.0A
12.8A
5
PAX World Growth Fund
XG
25
-23.0E
-6.1E
2
Security Social Awareness: A
GD
12
-13.1A
-4.2C
2
Women's Equity Fund
XG
11
-3.2A
2.5C
4
Global/International Equity Funds
Inv. Obj.*
Calvert World Values  International Equity:A
IL
159
-23.8D
-6.6E
3
Citizens Global Equity: Strd
GL
187
-29.0E
-.1C
4
MMA Praxis International
IL
22
-25.9D
-5.8D
2
Balanced/Blended Stock & Bond Funds
Inv. Obj.*
Calvert Social Balanced:A
BL
566
-5.4C
-.5D
3
Green Century Balanced
BL
58
-13.6E
19.9A
4
Pax World Balanced Fund
BL
1176
-9.1E
4B
4
Fixed Income Funds
Inv. Obj.*
Aquinas Fixed Income
AB
49
9.3A
5.4B
3
Calvert Social Bond:A
AB
102
13.4A
6.6A
3
Citizens Income Fund
IB
77
4.4E
3.5E
3
Eclipse Ultra Short Term Income
UT*
31
6.33
5.68
5
MMA Praxis Intermediate Income: B
IB
36
6.2E
3.9E
3
Parnassus Income CA Tax-Free
SS*
20
3.09
4.12
5
Parnassus Income Fund
BD*
14
11.31
3.57
3

Source: The Social Investment Forum
NOTES FOR CHART: All funds are at least three years old as of 9/30/01. The majority of fund objectives are from Lipper. All funds marked with an asterisk are not tracked by Lipper and are described by Wiesenberger's categories. The symbol (w) accompanies performance data in the Lipper 1-year and 3-year categories for these funds. NR indicates not rated/ranked by Lipper or Morningstar or Wiesenberger.

Objectives Key (Lipper Analytical Services):

AB = Long-Term Bond: Corporate A-rated; Corporate BBB-rated bonds.

BL = Balanced: A balanced portfolio of both stocks and bonds with the primary objective of conserving principle.

EI = Equity Income: Funds that seek high current income and growth of income through investment in equities.

GL = Global Stock: Funds that invest in securities traded outside of the U.S. May own U.S. securities as well.

IB = Intermediate Bond: Investment grade corporate debt (top four grades) with dollar-weighted maturities of five to 10 years.

IL = International: Canadian; International; and International Small Cap.

 

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