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August 09, 2001
Social Fund Assets in the U.S. May Top a Quarter of a Trillion Dollars in Ten Years
by Mark Thomsen
Study marking Pax World Funds' 30th anniversary also pegs current assets of U.S. socially
responsible mutual funds at $103 billion.
SocialFunds.com --
On August 8, 1971, two ordained ministers, a lawyer and a businessman launched the first socially
responsible mutual fund, the Pax World Fund, which is now the Pax World Balanced Fund (ticker:
PAXWX). Pax World Funds celebrated its 30th
anniversary yesterday by issuing a report on the past and future of socially responsible mutual
funds entitled "Socially
Responsible Mutual Funds in the U.S.: A Look Back... and Ahead." One of the main findings
of the report was that based on the growth rate since the Pax World Fund introduction, socially
responsible mutual fund assets could rise to over $278 billion in just ten years.
"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," said Pax World Funds President Thomas Grant. "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 commissioned Wiesenberger to analyze the growth of the socially responsible mutual fund
industry over the last three decades. Wiesenberger, a division of Thomson Financial Services, has
been tracking mutual fund data for over 55 years.
Wiesenberger found that in the last
thirty years the assets of socially responsible mutual funds grew about five times faster than
those of all other funds. In the report Wiesenberger says social mutual fund assets rose from $150
million in 1971 to a record $103 billion in mid-2001.
Steve Schueth, former president of
the Social Investment Forum and president of First Affirmative Financial Network, offered some
reasons why social investing has not been a flash in the pan. He said investors are much more
informed today, that in American society there is a growing yearning for spiritual fulfillment that
is infusing itself into different aspects of people's lives, and that women, who make up over 60
percent of shareholders in socially screened funds, have gained significantly in terms of power and
affluence.
Schueth stressed, however, that the major reason for continued growth in social
investing is the disproval of the belief that investors must sacrifice returns to invest with their
values. The Pax World Balanced Fund itself certainly has contributed to breaking that myth.
According to Lipper, the fund is in the 36th percentile of its peer group over a ten-year period,
meaning its performance during the last decade has been better than over half of all comparable
funds.
The second part of the report briefly touches on some key issues that may impact
socially responsible investing in the future. Pax convened a group of futurists to offer their
thoughts on the topic, and the issues they named included information technology, health, and
recycling.
Anita Green, Pax World Funds' Director of Social Research, articulated perhaps
the most important trend that will influence social investing in the near- to mid-term.
"Sustainability has become a major focus of companies in the U.S. and around the globe," said
Green. "With more and more industry leaders focusing on sustainable practices, SRI (socially
responsible investment) funds would appear to have enormous potential for continued expansion in
the coming decade."
The two ministers, the lawyer and the businessman perhaps did not
dream that their creation would still be helping people invest with their values thirty years
later. But the growing ranks of social investors indicate it may be around at least for another
thirty.
©
SRI World Group, Inc. All Rights Reserved.
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