My first encounter with socially responsible investing was with the Calvert, Domini, and Neuberger Berman socially responsive funds that I found in my employer's 401k plan. Contributing to a better world appealed to me, so I added them to my 401k portfolio.
As the recession deepened, I saw rates for saving accounts and CDs drop to pitiful levels. As of September 23,2009, the average CD rate was 1.751%. Of course, saving account rates are lower than that. Then I found MicroPlace. MicroPlace is an online broker-dealer that allows regular folks to make investments in the microfinance industry. I found MicroPlace while checking out the Oikocredit website, which mentions MicroPlace as a way for investors to invest in Oikocredit. I can choose an investment with only $20 minimum. For example, one investment I selected was "Advance social change in Nicaragua", which will be repaid in 2013, at a rate of 6% a year. As of September 23,2009, the average rate for a 4-year CD was 2.5%, according to bankrate.com. Granted, I invested only $30, but the difference in rate is pretty dramatic, as you can see. Today, I noticed there is now a "special liquidity" investment offered at MicroPlace by Oikocredit - unlike all the others, this one is practically a savings account - you can take your money out anytime. My monthly budget for savings/investment is pretty small, so MicroPlace is a great fit for me - the investments available through it pay better than savings accounts and CDs, and the investments benefit poor folks who need it.
More socially responsible investment options I've found for low budget investors:
FTSE KLD 400 Social Index Fund and FTSE KLD Select Social Index Fund at iShares.com. These are ETFs (Exchange Traded Fund) rather than mutual funds. The iShares site has a good little tutorial explaining the differences between their ETFs and regular mutual funds. Unlike the mutual funds I've found, these two ETFs do not have a minimum investment requirement. If I read their prospectuses correctly, I could theoretically start investing in them for just a few bucks, plus whatever the broker charges for a transaction if I'm using a broker (TradeKing for example charges $4.95 per trade.
Pax World Mutual Funds. Just about every mutual fund of theirs has a $250 minimum investment, with $50 minimum for subsequent investments. Many mutual funds have a minimum investment of $2000 or more, with a minimum of as much as $250 per additional investment. Every single Pax World mutual fund that I found has socially responsible goals. I saw on Google that Pax World filed to open up its own socially responsible ETF offerings too, but I guess that's still in the works.
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