Author Topic: Socially Conscious Index Funds?  (Read 334 times)

Beach_Stache

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Socially Conscious Index Funds?
« on: February 03, 2019, 08:26:55 AM »
Hi all,
I have relied on low cost stock index funds for pretty much all my investments.  I have a TSP and then Roth IRA and post-tax investing through Fidelity and the TSP is in C/S funds, Roth is in the low cost S&P index funds or the new zero fee funds.  I pretty much set it and forget it w/automatic investing each month, knowing that I probably won't be pulling any money out (maybe some from my post-tax investing for home renovations w/in the next 5-10 years) for another 20 years or so. 

I am trying to be more socially and environmentally conscious though and read an article recently about socially conscious investing, so things like renewable resources, animal free, environmentally friendly investing.  I'm not really sure where to get started though, and I don't know enough about this investing area other than the fact that sustainable energy and animal free products is going to be a big part of the future, as it's just not sustainable to be eating so much meat and continuing to use fossil fuels.

So, does anyone know about any low-cost index funds in Fidelity that are environmentally based or socially conscious or something like that?  I figure if I'm investing for the 20 year future and the fact that I think the industry is going to have to move this way pretty quickly in the next decade or so, and the fact that I'd probably feel better about myself investing at least some money this way, I'd like to try and put something towards this area.

Any advice or suggestions would be great to hear!  Looking for low-cost, set it and forget it funds.  Thanks!

Indexer

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Re: Socially Conscious Index Funds?
« Reply #1 on: February 03, 2019, 09:58:14 AM »
These are the two funds I know of that best represent what you are looking for.

Vanguard ESG U.S. Stock ETF (ESGV)  Cost: 0.12%
https://investor.vanguard.com/etf/profile/ESGV

Vanguard ESG International Stock ETF (VSGX) Cost: 0.15%
https://investor.vanguard.com/etf/profile/VSGX

These are extremely diversified with over 1000 stocks each. They are index funds, but have an ESG(environmental, social, governance) screen. They are the essentially the ESG equivalents of Vanguard Total Stock and Vanguard Total International stock funds commonly used by mustachians.

EvenSteven

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Re: Socially Conscious Index Funds?
« Reply #2 on: February 03, 2019, 10:34:07 AM »
As Indexer said, those are probably your best options, but make sure that what they consider "socially conscious" agrees with what you do.

If you think microbrews, pornography, and science are scourges that should be driven from society, then those are good funds. (If you couldn't tell, I'm critical of them)

I think the best advice is to invest in a way that will give you the best return, then use your free time and money to be more directly involved in the social change you want to see.

Beach_Stache

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Re: Socially Conscious Index Funds?
« Reply #3 on: February 03, 2019, 12:12:35 PM »
Thanks so much for the reply!  Do you know if Fidelity has any funds similar to the ones you mentioned in Vanguard?  I'd prefer to keep the money in Fidelity, just b/c I already have accounts there, so it's just easier for me rather than creating a new fund in Vanguard.

MustacheAndaHalf

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Re: Socially Conscious Index Funds?
« Reply #4 on: February 03, 2019, 07:44:39 PM »
This page seems to highlight Fidelity's offerings of socially responsible mutual funds:
https://www.fidelity.com/mutual-funds/investing-ideas/socially-responsible-investing

Unfortunately their link to "ESG-focused ETFs" lands on a page with no mention of ESG, and no ability I can see to screen out non-ESG ETFs.  So it looks like you're limited to the four Fidelity ESG mutual funds listed on the above page.

Just to clarify a few terms, those are ETFs, not mutual funds.  An ETF can be purchased at any brokerage like a stock, but you would pay a commission to buy or sell it ($7/trade?).  Mutual funds tend to only be free at the same brokerage that created the fund (Fidelity mutual funds at Fidelity, etc).  Also, you wouldn't open a "fund" at Vanguard, but an account.  That account can then buy ETFs (even ETFs of other companies like Schwab or Fidelity for $0/trade - a change they made in the past 6 months) or Vanguard mutual funds.