Socially responsible retirement

December 7, 2015 7:45 PM

Better late than never: I'm finally starting a retirement account, probably a Roth IRA¹. Social responsibility is high on my priority list. I am trying to find a relatively easy, relatively low-fee, relatively well-performing "socially responsible"² fund I can start paying into. Where should I look for comparisons or guidance on these "socially responsible" funds? How can I get guidance on which one to choose? Direct advice, or referrals to reliable references both welcome.

Footnotes:
1. I'm 40, conventionally employed, and have a pension but want additional retirement income. My spouse will also be shopping for retirement plans - she is self employed. Don't worry, we will get some tax advice from a professional for the details on this.

2. I'm sure it would be well meaning, but please do not use this space to try to disuade me from socially responsible investing. I have read the arguments against already, I recognize the limitations of these funds in terms of payout and the differences these folks might have with my personal definition of socially responsible, etc. Assume I'm not going to move on the big picture goal of finding a "responsible" investment product. Thanks.

posted by latkes to Work & Money (9 answers total)

Vanguard funds are good and relatively low-fee. How about VFTSX?

As an added bonus, Vanguard is a non-profit, unlike many other banks and investment firms.
posted by redlines at 7:53 PM on December 7, 2015 [5 favorites]

iShares KLD is specifically designed for you.
posted by grumpybear69 at 7:59 PM on December 7, 2015

You could roll your own by buying sector funds in tech, entertainment, healthcare, real estate, etc (just leaving out defense and energy).
posted by miyabo at 8:00 PM on December 7, 2015

Vanguard is a non-profit

No, Vanguard is a for-profit corporation that supposedly minimizes its profits for the benefit of investors.
posted by JackFlash at 9:03 PM on December 7, 2015

I'm not the most investing savvy by any means, but a friend who is more so recommended Green Century to me. I was able to navigate opening a Roth with them, and am pleased with its performance thus far. Their goal is fossil fuel free investing.
posted by jaksemas at 10:11 PM on December 7, 2015

When I was in a similar situation to yours, I used this site to help select mutual funds that were sound investments into the sorts of causes I cared about.
posted by DrGail at 4:48 AM on December 8, 2015

Just a note to be sure that you check the annual Expense Ratios (ER) of the funds you consider. There's a heck of a lot of difference between 0.27% and 2.43% coming off the top when you're talking about potential growth year over year over year.

Here's a fairly lively exchange from June, with lots of links, on socially responsible investing over at bogleheads.org.
posted by Short Attention Sp at 5:03 AM on December 8, 2015 [2 favorites]

I'm in the process of moving my Parnassus Funds to Vanguard because of the difference in fees (and also to get everything in one place, as I already had a non SR-IRA with Vanguard). That said, I've been pleased with Parnassus over the years, and they've been around longer than a lot of the socially responsible funds. You can also use google finance to compare funds - that's what finally convinced me to switch my Parnassus to a Vanguard Socially Responsible fund.
posted by ldthomps at 7:33 AM on December 8, 2015

Socialfunds.com is one place you can look. One thing to note is that some of the really low-fee ones don't do any proxy voting (i.e. voting your shares on resolutions that push for socially responsible positions by companies), which to me is probably equally important (as far as chances of actually making change) than where they're invested, if not more so. Hence why I went with Domini, which is focused on being socially responsible and does a lot around proxies, rather than a SRI-screened fund at a traditional place like Vanguard.
posted by EmilyClimbs at 7:08 AM on December 9, 2015