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Alternative Market Briefing

Socially responsible investing maintains pace through 2009

Friday, September 11, 2009

From The Opalesque Team:

KLD Research & Analytics' FTSE KLD 400 Social Index returned 3.63% in August bringing the index up to +18.46 YTD and showing that socially responsible investing may not only be a personal decision, but a profitable one. The index launched in 1990 and has posted annualized returns of 9.08%.

The International Finance Corporation (IFC - a member of the World Bank) does extensive reporting on socially responsible investing and defines this area as: "based on the premise that companies that ignore social and environmental concerns, and that fail the test of good governance, are unlikely to be good long-term investments, regardless of their ability to generate cash flow in the short term."

In mid 2009 US based research firm Cerulli gave a boost of confidence to socially responsible investing reporting on the success the space had in comparison to strategies without the focus. "Asset managers that employ a socially investing strategy need to dispel the myth that these types of funds do not perform as well as their counterparts," said the report's author Pamela DeBolt. "In this market, investors are looking to recoup their losses. SRI asset managers have to communicate that providing return is paramount, and that SRI funds are competitive with the larger population of funds." (Source)

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