Diversification between Socially Responsible Investment Funds

Socially responsible investment funds provide investors with a way to diversify their portfolios. Here are a few things to consider about diversification between socially responsible investment funds.

Socially Responsible Investment Funds

A socially responsible investment fund is like a mutual fund that invests in companies that fit a certain social criteria. These companies adhere to strict rules when it comes to helping the environment or society as a whole. This type of investment allows investors to easily invest in a particular cause that they identify with.

Diversification

These investments are very diversified, and they provide the average investor with a way to gain diversification. Investors pool millions of dollars together so that the investment fund can choose securities for them. With all of this money, they are able to buy hundreds of different securities, which creates a very diversified portfolio for the group. If one of the socially responsible companies goes under, it is not going to negatively impact the group as a whole very much. Most individual investors do not have the money that it takes to diversify their own portfolios. However, by combining their assets together with others, they can accomplish this goal.

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