Socially responsible fund

Ethical Fund

A mutual fund in which the asset managers make investment decisions based upon some ethical code. An ethical fund is marketed to investors who may have moral objections to certain investment vehicles or companies. For example, an individual may have a moral objection to smoking and may therefore buy shares in a mutual fund that refrains from investing in tobacco companies. Ethical funds may have positive or negative guidelines; that is, a fund's ethics may inform where it makes investments (e.g. in environmentally friendly companies) and where it does not (e.g. in arms manufacturers). See also: Green fund, Islamic finance.

Socially responsible fund.

When socially responsible mutual funds, also known as green funds or conscience funds, select securities to meet their investment goals, the securities must also satisfy the fund's commitment to certain principles spelled out in the fund's prospectus.

For example, a socially responsible fund might not buy shares of a manufacturing company that operates factories that fund managers consider sweatshops. Or the fund might not buy shares of a food company that sells out-of-date products in emerging markets.

Since the priorities of these funds vary, you may need to do some investigating to find one that matches your values.