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Mixed-bag returns from global feel-good funds

What are we looking for?

Socially responsible mutual funds investing around the world.

Most of these feel-good funds have focused on the Canadian stock market, but firms have been rolling out more offerings with a global mandate.

The screen

We ranked the one-year return to Dec. 31 for funds categorized under global equity by the Social Investment Organization (SIO), which promotes the concept of socially responsible investing.

We excluded the U.S. dollar and duplication versions of the same funds.

What did we find?

A mixed bag of returns amid a mixed bag of global funds.

Some are like any typical global equity fund except that they screen out firms using socially responsible criteria. Others hone in on themes such as climate change and sustainability.

NEI Investments' Ethical Global Dividend fund, which rose to the top with a 14.1-per-cent gain, avoids firms that make tobacco, military equipment and nuclear energy, but invests in firms with good environmental records.

The value-oriented fund invests in about 25 stocks and had a yield of 4 per cent at the end of December. Its return was helped by the performance of companies such as Finnish-based Konecranes, the world's largest maker of crane equipment; Swedish-based Autoliv, the world's largest maker of airbags and seatbelts, and U.S.-based ConocoPhillips, an integrated oil company, said manager KC Parker of Beutel Goodman & Co. Ltd. He took profits and sold the latter two companies recently.

Criterion Water Infrastructure was not far behind with a 14-per-cent return, but this fund no longer exists. It was merged this month with another fund to create Criterion Utility Plus, which has no socially responsible theme.

TD Global Sustainability has been a laggard, but managed to break even. It is two-thirds invested in large-company stocks that meets certain environmental, social and corporate-governance criteria, while the balance has been in underperforming clean technology stocks.

Clean technology has not done well partly because of concerns about firms being able to get subsidies from the U.S. and European governments as they face debt woes, said manager Thomas George of TD Asset Management Inc.

But very cheap valuations plus an oil price near $100 (U.S.) a barrel are among factors that now make it "ripe for these stocks to outperform," he suggested.



Calendar year % return
Fund name1-year % rtn(to Jan. 31)201020092008200720062005MERAssets($-mil)
Ethical Global Dividend-A14.17.912.1-23.0---2.538.7
Criterion Water Infrastructure-A14.011.011.1-33.8----10.1
PH&N Community Values Glb Equ.-D11.75.916.6-27.8-13.616.
RBC Jantzi Global Equity11.46.45.7-29.1---2.1510.3
Scotia Global Climate Change10.44.98.0----2.628.9
Mackenzie Univ Sustainable Opp Cl9.93.914.6-30.8-6.923.67.92.4618.7
Investors Summa Global SRI A9.23.325.9-33.5---2.7112.3
Acuity Social Values Global Equity8.54.89.3-29.7-5.916.49.02.9917.5
Meritas International Equity8.13.710.7-33.1-0.719.310.52.8926.1
Ethical Global Equity7.93.717.4-26.2-9.523.32.02.6334.0
IA Clarington Inh Gl Eq SRI Cl-A6.61.4-----2.607.9
HSBC Global Climate Change-I2.2-5.74.0----2.927.4
TD Global Sustainability-I0.1-6.110.7-33.1---2.4211.1
MSCI World ($ Cdn)6.811.8-26.1-
Source: Globe Investor

© 2007 The Globe and Mail. All rights reserved.

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