Research

2010 Key Trends in SRI Funds

Introduction

This report presents the findings of a study conducted by Eurekahedge analysts on more than 1,000 SRI funds. The aim of this research report is to find the aspects of the industry in 2010, such as where the funds are investing, which sectors and asset classes and what are the different criteria being employed.

Socially responsible investment schemes, SRIs for short, are funds that seek to incorporate a variety of moral and ethical principles into their investment decisions. As such, in addition to traditional quantitative assessment of risk/return profiles, asset managers also employ increasingly sophisticated environmental, social and governance (ESG) criteria to screen for potential investments. Also known as ethical or socially conscious investing, the concept is not new and has been around since the 19th century; however, recent world events and increasing reach of information and spread of ideas have garnered greater attention for this sector.

While the origins of social investing lie in negative screening based on religious concepts, the categories within SRI’s have expanded rapidly over the last 50 years to encompass various ideological and political sentiments. Currently, the most widespread criteria employed by SRI funds include environmental record, human rights and corporate governance. For a more detailed discussion on the history, evolution and concepts of socially responsible investments in different parts of the world, please refer to the various articles 1 on the Eurekahedge website.

Changes in the Number of Funds and Assets under Management

Figure 1 shows percentage changes in the number of funds and industry assets over the last three years.

Figure 1: Percentage Growth in SRI Funds

Through the 2008-2009 period, SRI funds…

 

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