fb-undiscoveredsriMost investors today want funds that seek out companies that are environmentally friendly, have good labor practices, and are well managed. But with more than 25,000 funds available today, how can you find funds that are trying to do the right thing?

We’ve been managing portfolios of sustainable funds for decades, and now there are far more funds to choose from. These funds tend to fall into two distinct groups:

1. The Usual Suspects: Sustainable or Socially Responsible Investing (SRI) Funds

The first group are self-professed sustainable responsible impact or socially responsible investing (SRI) funds. These funds are easy to spot because they often have “sustainable” or “responsible” in their name.

Many of these funds have been around a long time, and they take a comprehensive approach to sustainable investing. They have a mandate to invest in companies that have strong environmental policies, social programs and corporate governance practices (this is known as ESG), and most of these funds also avoid investing in objectionable companies or industries, like tobacco.

Many SRI funds also actively engage with companies, using their power as shareholders to file shareholder resolutions, vote proxies and meet with company management in an attempt to change a company for the better.

Where to find SRI funds?

You can find lists of self-professed SRI funds online, like this one from the The Forum for Sustainable and Responsible Investment (USSIF), but they often include load funds; funds that are only open to institutional investors; and funds that don’t have sufficient assets. Online lists can be a good starting point, but you’ll need to do some additional work to determine which of these funds are actually worth owning.

We’ve been covering SRI funds in NoLoad FundX for many years, and we screen SRI funds to make sure the funds we cover are noload, available to retail investors, and well established.

2. The New World of Undiscovered SRI funds

Now, you no longer have to limit your portfolio to self-professed SRI funds. New tools have identified a number of previously undiscovered SRI funds. These funds invest in companies with good environmental, social and governance (ESG) policies, but the funds aren’t required to seek out companies that are trying to make a positive impact. They’ve usually bought these companies for other reasons—perhaps the stock has good growth characteristics, or the fund manager believes the stock is trading at a discount.

Undiscovered SRI funds could improve your results. In October 2016, Barron’s looked at the performance of 200 sustainable funds (including both self-professed and undiscovered SRI funds) and found that 50 of these funds beat the market over the past year, but just one of the 50 funds was a self-professed sustainable fund; the others were all all undiscovered.

Where to find undiscovered SRI funds? Continue reading “Undiscovered Sustainable Funds” »


fb-electionyearinvestingThis year’s election has many investors on edge, and they’re wondering what they should do.

But elections typically don’t have as much of an impact on the market and on the economy as many investors expect.

The market historian and Wharton Professor Jeremy Siegel studied this in his classic book, Stocks for the Long Run, and found that:

“The market almost always declines in reaction to sudden, unexpected changes related to the presidency… sell-offs such as these provide good opportunities for investors to step up and buy stocks because the market usually reverses itself quickly following the change in leadership.”

Recent data shows that the election rally often starts even before the election.

This isn’t to say that you should sell stocks in anticipation of an election-related sell-off that may never happen. 

The best course of action is to simply stick with your plan. That’s the hard, but essential, lesson we’ve learned in our decades of fund investing. It’s not easy to do, but it’s what must be done if we hope to get ahead. Selling based on fear and trying to properly time the market is almost always impossible.

If we could predict the future, we could make ourselves very wealthy overnight by betting on something we knew was a certainty. But we don’t know the future so we have to find a way to make our money grow over time with the understanding that it won’t be perfect, and there will be times when we have to hold our noses. In hindsight, those times we had to hold our noses are often the best times to invest. Conversely, the least successful times to invest are often when it looks like the coast is clear.

3 ways to avoid election year mistakes

1. Avoid making extreme changes to your portfolio

Trying to time the market is a mistake. Market timing doesn’t have a strong record of success. We’ve found that timing the market is less successful over the long run than simply sticking with your investment approach. Financial analyst and editor Mark Hulbert studied hundreds of market timing strategies, and concluded that the best approach was to stay invested. As wrote in Barron’s earlier this year:

“To bet that this time is different and that the right course of action is to go to cash or any other alternative asset class, such as bonds or gold, you have to bet that you will succeed when almost all professional market timers in the past have failed. That’s a triumph of hope over experience.”

But if you feel you absolutely need to do something, make a small change to your investments. Avoid making extreme moves. If you feel like you need to sell, sell just a small part of your portfolio.

If you’re over 70 and haven’t taken your IRA’s required minimum distribution, you could take that now as a way to take a little of your portfolio off the table. Selling means you could miss out on gains, and that if the market continues to move higher, you won’t fully participate. But if it helps you avoid selling out entirely, then it’s a move worth making—but make sure you have a plan for how and when you’ll get fully invested again.

2. Focus on the most likely outcome, not the worst case scenario

If you’re focusing on the worst case scenario rather than the most likely outcome, you may be making another mistake. This is an example of probability neglect, a powerful cognitive bias that causes us to concentrate on the worst possible outcome rather than the most likely one. It makes us feel like we are wisely preparing ourselves for potential dangers, but focusing on our biggest fears can really warp our perspective. It can make us see the stock market as a way to lose wealth rather than a way to build wealth. Continue reading “3 Ways to Avoid Election Year Mistakes” »


Sustainable Investing – How to Get Started (video)

September 14, 2016

If you’re interested in having your investments reflect your values, where do you start? FundX President Janet Brown has been managing sustainable portfolios for decades now, and she explains how sustainable funds can help you make money and make a difference. Click below to watch: Trouble viewing this video? Find it on YouTube here. Summary: […]

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How to Make Money and Make a Difference

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How can you make a difference as an investor? How can you grow your portfolio and also make a positive impact on the world around you? These are the questions we’re increasingly hearing from investors. They know they need to invest for growth so they’ll have a secure and comfortable retirement, but they also see […]

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Plan for Changing Bond Markets

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Many retirees want to preserve their capital, so bonds have often been a key component of their portfolios. But some retirees wonder if bonds can continue to provide the stability they’re looking for. They’ve spent decades putting aside money for their retirement, and they don’t want to risk losing it now. One thing we’ve learned […]

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FundX President Janet Brown’s Take on 4 Funds & ETFs

August 17, 2016

Should you invest in preferred stock funds? Is it time to buy back into Europe ETFs? FundX President Janet Brown answered these questions and more from investors from across the country on the “Hold it or Fold it” segment of the MoneyLife Show with Chuck Jaffe on August 9, 2016. Get her take on small-caps, […]

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Is the Market Overvalued?

August 10, 2016

Is the market overvalued? We recognize that valuations could be a hurdle for the market going forward, but remember that there are also a lot of possible ways in which valuations could continue to improve even as the market goes higher. This is why it’s so important to be open-minded about the market. Market trends are […]

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Tips for Taking Your Required Minimum Distribution (RMD)

August 3, 2016

When you turn 70½, the IRS requires that you withdraw a minimum amount from your retirement account(s) each year in what’s called a required minimum distribution, or RMD. It’s important to take your RMD, even if you don’t need the money, because if you don’t, you’ll face a steep penalty of 50% of the amount […]

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Bonds or Bond Funds?

June 30, 2016

If interest rates are expected to rise, which is a better bet: individual bonds or bond funds? FundX President Janet Brown has been investing in bond funds for decades, and in her latest piece for The Street, she explains why funds are a more cost-effective way of owning bonds and how they can help you navigate […]

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FundX CIO Jason Browne’s Take on 5 Funds & ETFs

June 28, 2016

Is now a good time to own mid-cap funds? What about foreign bond funds? FundX Chief Investment Officer Jason Browne answered these questions and more on the Money Life Show with Chuck Jaffe. Find out what you can expect from gold ETFs, why you should focus on dollar-hedged foreign bond funds, and why you should […]

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