7 Best Socially Responsible Mutual Funds

Invest with your heart with these best SRI mutual funds.

Barbara Friedburg

SRI mutual funds tend to be value-focused.

The socially responsible investing category is exploding, driven by investors' desire to invest with their values. These funds are often categorized under ESG, which stands for environmental, social and corporate governance. David Edwards, the founder of Heron Wealth, says: "This is not an easy concept to navigate, as many fund companies just slap an ESG label on an existing fund and shove it out the door." Heron adds that most socially conscious mutual funds are large-cap growth or value-focused. After excluding sectors such as carbon, tobacco or defense, the SRI mutual funds tend to overweight technology and financial services companies and subsequently are less diversified and more volatile than more broadly focused large-cap funds. To narrow down the field, here are seven socially responsible mutual funds.

Factors portfolio managers consider when building ESG funds.