Investing With Values

Q How should I invest in socially responsible companies? — D.L., Monticello, Minnesota

A The easiest way is to park your dollars in one or more mutual funds — or exchange-traded funds (ETFs) — that follow socially responsible guidelines. That way, you’re letting the fund managers do the research and make the buy and sell decisions. Or, in the case of passively managed funds, you’re simply investing in the same securities that are in a socially responsible index. Some will have the acronym ESG in their title, meaning that they focus on environmental, social and governance factors. Note, too, that some of these funds invest in companies that do well on socially responsible measures, while others simply exclude companies that don’t.

Some funds you might look into include the Vanguard FTSE Social Index Fund Admiral Shares (VFTAX), the iShares MSCI USA ESG Select ETF (SUSA), and the Vanguard Global ESG Select Stock Fund Investor Shares (VEIGX).

You can also invest in individual companies you select on your own, but first you’ll need to decide which issues matter most to you. For example, you might consider the environment; gender equity and diversity; workplace conditions and other human rights issues; and whether you’re willing to support companies involved in gambling, tobacco, weapons and/or alcohol. Few companies will be perfect on every issue. Learn more at GreenMoney.com, CorpWatch.org and CSRwire.com.

Q What’s a sector? — C.F., Erie, Pennsylvania

A The words “sector” and “industry” are often used interchangeably, but sector often refers to a larger segment of the economy. The industrials sector, for example, includes the airline industry as well as the construction industry, while the health care sector includes everything from hospitals to medical-device makers and biotech companies. Want more information about stocks? Send us an email to foolnews@fool.com.