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SRI funds delivering “strong and competitive returns” – Canadian study

New research from Canada’s Social Investment Organization

A new research study from Canada’s Social Investment Organisation (SIO) has found that socially responsible investment (SRI) mutual funds can deliver “strong and competitive returns”.
The SIO, the Canadian SIF, recently conducted an in-depth analysis of returns for SRI funds in the country across major asset classes.
It was based on performance data from Canadian fund information provider Fundata, whose data contains more than 850 data points on over 16,000 investment funds and related products.

As an example, in the Canadian Equity category, the average of SRI funds outperformed the average of all Canadian equity funds on a one, three, five and 10-year basis.

In the Canadian fixed income class, SRI funds on average outperformed the average on a one, three and five-year basis and was identical on a 10-year view. Half or more of the SRI funds in this segment outperformed the industry average on a one, three, five and 10-year basis, the report says.The results for Canadian Equity Balanced and Global Equity were “mixed but still positive”. The study says the longer term performance of SRI funds in these categories must be “cautiously interpreted” because of a lack of a long-term track records.

The research also looked at SRI funds in the money market, small/mid-cap equity and US and international equities and found strong relative performance.

“It will take some time for the long-term performance of the SRI industry to reveal itself because of the relatively short-term track record of most funds, but early results are encouraging,” it says.

“Socially responsible investors and fund managers are also aware that companies that effectively manage ESG issues are, overall, better placed to manage long-term risk to shareholder value,” said SIO Associate Director of Research Ian Bragg. “As this study shows, another compelling reason to consider SRI funds is the delivery of strong and competitive returns.”

The Social Investment Organization is holding its annual conference in Montreal on June 18-20.