A Feel-Good Investing Option

One decision I made earlier this year that I’m happy with is moving some of my investments into the MSCI KLD 400 Social Index. In a nutshell, it’s an exchange traded fund similar to S&P 500 index funds with a key exception. It parses out companies that are significantly involved in the following industries: alcohol, tobacco, firearms, nuclear power, military weapons, and gambling.

Personally, I feel better knowing that I’ve at least made an attempt to not build my nest egg through death, destruction, and exploitation.

Also interesting. Economist James A Brander in The Journal of Business Ethics found that the companies meeting the criteria for this fund tend to have somewhat more sane executive compensation packages (12% lower on average) relative to the executives in the death, destruction, and exploitation industries.

Many Americans don’t have the luxury of choosing ethical funds for investments due to the limited choices offered by their 401k plans (assuming they’re in a position where they can invest at all). But, if you have money with more flexibility (ex. IRA, Roth IRA, Rollover IRA or money in non-retirement investments), know that there are options available worth checking out such as this.

3 thoughts on “A Feel-Good Investing Option”

  1. @Cpt. Capitalism, interesting analysis. The limited choices offered by 401k plans sure work out great for the companies that fall within those plans. I wonder how many people choose to change jobs due to the flexibility they can gain over their retirement savings by rolling their 401k into more flexible investments?

  2. Looks like it holds its own perfectly well against the S&P 500, too. Over 10 years it’s eked out a tiny bit more than the S&P 500.

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