WHAT ARE WE LOOKING FOR?
How socially responsible investment funds are faring in this bear market.
These are feel-good funds that may take a stand against tobacco, alcohol, gambling, military equipment and other nasty things or invest in progressive firms with strong environmental records and fair labour practices.
We checked out the domestic stock funds with the help of the Toronto-based Social Investment Organization, which promotes socially responsible investing in Canada. We included exchange-traded funds, but excluded duplicate, pooled and retail venture capital funds.
WHAT DID WE TURN UP?
Lots of red ink among these funds, although their investors can take some comfort in having a clear conscience.
Most large-company stock funds lost a third of their value, and underperformed market benchmarks. Their performance was not unlike conventional funds.
Ethical Growth and Investors Summa SRI - which have more than 20-year track records - respectively posted the best and worst returns in this group last year.
Ethical Growth, which is run by Robert Hammill of Guardian Capital LP, shed the least with a 31-per-cent drop in 2008. It fared better than the S&P/TSX Total Return, which turned in a 33-per-cent loss. Top names included Shoppers Drug Mart Corp., Royal Bank of Canada and Goldcorp Inc..
Investors Summa Fund run by Daniel McClure and Keith McLean of Investors Group Inc. stumbled with a sharp 50-per-cent loss. It didn't help that the fund had about 50 per cent of is assets invested in the battered financial and energy sectors.
Smaller-company funds have had a rougher ride. Their stocks have taken a shellacking as investors have fled to more liquid, and less risky stocks. Mavrix Sierra Equity stumbled the worst with a 65-per-cent slide, pulled down by stocks like beaten-up silicon producer Timminco Ltd.
The fund is now undergoing a makeover with manager Ray Steele taking over from Paul Mesburis last month. He is turning Mavrix Sierra into an all-capitalization fund with big bank names in the mix now.
Mavrix Sierra gained 2.6 per cent in January. The fund is now playing the infrastructure theme with names such as Tonbridge Power Inc. and the alternative energy sector through names such as U.S.-based First Solar Inc.
Social responsible investing may be good for your conscience, but there's no guarantee that it will be good for your portfolio.
|Returns of socially responsible funds in this bear market|
|(as of Jan '09)||Latest||1-mo||% return|
|Fund name||Category Assets ($-mil)||MER||% rtn||2008||2007||2006||2005||2004||2003||2002||2001|
|Ethical Growth||Cdn Focused Eq||251.8||2.30||-4.9||-31.2||2.4||19.6||15.7||8.2||17.5||-15.1||-7.2|
|RBC Jantzi Canadian Equity||Canadian Equity||8.3||2.07||-2.9||-31.9|
|Desjardins Environment||Canadian Equity||89.8||2.35||-2.9||-32.4||15.1||17.0||30.6||11.8||22.2||-12.0||-8.0|
|Ethical Canadian Index||Canadian Equity||17.5||1.00||-2.9||-32.5||9.1||16.3||21.0|
|PH&N Community Val Cdn Eq-D||Canadian Equity||20.6||1.40||-3.2||-33.2||4.1||15.6||20.5||14.7||26.4|
|Ethical Canadian Stock||Canadian Equity||0.4||2.50||-3.7||-33.3||16.7|
|iShares CDN Jantzi Social Ind||Canadian Equity||13.3||0.50||-3.3||-35.5|
|Meritas Jantzi Social Index||Canadian Equity||52.6||1.94||-3.4||-36.0||5.3||16.7||19.8||12.3||26.5||-17.0|
|Vancity Circadian Cdn Equity||Canadian Equity||1.0||2.50||-4.4||-37.4|
|Inhance Canadian Equity-A||Canadian equity||1.3||2.50||-4.5||-37.7||9.8||12.2|
|London Life Ethics (GWLIM)||Canadian Equity||61.6||2.82||-2.9||-38.1||15.2||9.4||23.4||11.7||24.4||-9.5|
|GWL Ethics (G) NL||Canadian Equity||7.1||2.90||-3.0||-38.9||16.3||9.4||24.6||12.5||26.8||-7.3||-10.6|
|Acuity Alpha Social Values Port||Cdn Focused Eq||2.83||-1.6||-40.4|
|Acuity Social Values Cdn Equ||Canadian Equity||2.95||0.1||-46.3||3.5||14.8||18.2||12.6||41.8||-7.1||4.9|
|Investors Summa SRI FundTM C||Cdn Focused Eq||837.8||2.84||-0.4||-49.7||4.8||16.0||14.2||9.3||23.1||-24.0||-11.6|
|S&P/TSX Total Return||-3.0||-33.0||9.8||17.3||24.1||14.5||26.7||-12.4||-12.6|
|S&P/TSX composite index||-3.3||-35.0||7.2||14.5||21.9||12.5||24.3||-14.0||-13.9|
|Ethical Special Equity||Cdn Small/Mid Cap Eq||196.9||2.76||0.2||-32.6||8.5||10.1||24.8||18.0||36.4||25.8||25.8|
|Acuity Clean Envir. Equity||Cdn Foc Sml/Md Cp Eq||2.92||-0.9||-52.7||30.3||7.7||16.2||11.4||35.9||-25.2||-13.4|
|Mavrix Sierra Equity||Cdn Foc Sml/Md Cp Eq||4.6||2.98||2.6||-64.9||21.1||14.0||21.6||19.8||16.6||-9.0||-24.4|
|BMO Nesbitt Burns Cdn Small Cap Index||2.5||-46.6||2.0||16.6||19.7||14.1||42.7||-0.9||3.4|
|S&P/TSX Small Cap||-0.3||-47.9||-2.9||6.7||8.9||5.8||33.0||-4.3||3.2|
SOURCE: GLOBEFUND, SOCIAL INVESTMENT ORGANIZATION
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