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Socially responsible investing (SRI) is gaining prominence fast. Also known as social investing, it takes into account financial returns from investment as well as social/environmental benefits of the same.
Ethical investing allows individuals to put money into companies whose practices and values align with their personal views. Lately, many have expressed concerns about being indirectly invested in gun and weapon makers through mutual funds. A number of petitions have been signed as protests against militarism and relaxed gun laws.
At a time when defense stocks have performed well, ethical investors are increasingly choosing to go weapon-free. For investors who are vexed by rising instances of violence and bloodshed, weapon-free mutual funds are an option.
How to Screen Low Weapon Risk Funds?
Weapon Free Fundscalculate the total number of flagged holdings in a fund’s portfolio by taking into account the total amount and percentage of a fund’s assets invested in such companies.
Further, Weapon Free Funds categorize mutual funds into three screen groups, viz., military weapons, civilian firearms, and both military and civilian weapons combined. After closely monitoring the funds, they are awarded one of the following weapon grades:
A – The fund has no direct investments in military weapon manufacturers, civilian firearm manufacturers or civilian firearm retailers.
B – The fund has direct investments in civilian firearm retailers but not in military weapon manufacturers or civilian firearm manufacturers.
F- The fund is invested directly in military or civilian weapon manufacturers, the likes of which include major military contractors and weapon manufacturers.
3 Best Choices
We have selected three weapon-free mutual funds with a Zacks Mutual Fund Rank #1 (Strong Buy) and #2 (Buy) that are poised to gain. Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000 and each of these funds carries a weapon gradeA.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
New Alternatives Fund Class A (NALFX - Free Report) invests in companies that contribute to a sustainable environment. The fund seeks long-term capital growth with income as its secondary objective. The fund primarily invests in common stocks of companies and even in other equity securities such as real estate investment trusts and American Depository Receipts.
This Zacks sector - Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here .
NALFX has an annual expense ratio of 1.12%, which is below the category average of 1.30%. The fund has three and five-year returns of 16.2% and 10.6%, respectively.
Pax Ellevate Global Women’s Leadership Fund Individual Investor Class (PXWEX - Free Report) seeks returns on investment that exceed the price and yield performance of the Pax Global Women's Leadership Index. The fund invests more than four-fifths of its assets in securities of the components of the Women's index, the likes of which may include American Depositary Receipts, Global Depositary Receipts and Euro Depositary Receipts.
This Zacks sector – Global-Equity product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PXWEX has an annual expense ratio of 0.81%, which is below the category average of 1.10%. The fund has three and five-year returns of 12.1% and 9.1%, respectively.
Calvert Global Water Fund Class A (CFWAX - Free Report) tracks the performance of the Calvert Global Water Research Index. The fund normally invests the majority of its assets in equity securities of domestic as well as foreign companies from the water industries or are involved in water-related service and technologies.
This Zacks sector - Sector-Energy product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here .
CFWAX has an annual expense ratio of 1.24%, which is below the category average of 1.36%. The fund has three and five-year returns of 8.3% and 6.6%, respectively.
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3 Weapon-Free Funds for Ethical Investing
Socially responsible investing (SRI) is gaining prominence fast. Also known as social investing, it takes into account financial returns from investment as well as social/environmental benefits of the same.
Ethical investing allows individuals to put money into companies whose practices and values align with their personal views. Lately, many have expressed concerns about being indirectly invested in gun and weapon makers through mutual funds. A number of petitions have been signed as protests against militarism and relaxed gun laws.
At a time when defense stocks have performed well, ethical investors are increasingly choosing to go weapon-free. For investors who are vexed by rising instances of violence and bloodshed, weapon-free mutual funds are an option.
How to Screen Low Weapon Risk Funds?
Weapon Free Fundscalculate the total number of flagged holdings in a fund’s portfolio by taking into account the total amount and percentage of a fund’s assets invested in such companies.
Further, Weapon Free Funds categorize mutual funds into three screen groups, viz., military weapons, civilian firearms, and both military and civilian weapons combined. After closely monitoring the funds, they are awarded one of the following weapon grades:
A – The fund has no direct investments in military weapon manufacturers, civilian firearm manufacturers or civilian firearm retailers.
B – The fund has direct investments in civilian firearm retailers but not in military weapon manufacturers or civilian firearm manufacturers.
F- The fund is invested directly in military or civilian weapon manufacturers, the likes of which include major military contractors and weapon manufacturers.
3 Best Choices
We have selected three weapon-free mutual funds with a Zacks Mutual Fund Rank #1 (Strong Buy) and #2 (Buy) that are poised to gain. Moreover, these funds have encouraging three and five-year returns. Additionally, the minimum initial investment is within $5000 and each of these funds carries a weapon gradeA.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
New Alternatives Fund Class A (NALFX - Free Report) invests in companies that contribute to a sustainable environment. The fund seeks long-term capital growth with income as its secondary objective. The fund primarily invests in common stocks of companies and even in other equity securities such as real estate investment trusts and American Depository Receipts.
This Zacks sector - Other product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here .
NALFX has an annual expense ratio of 1.12%, which is below the category average of 1.30%. The fund has three and five-year returns of 16.2% and 10.6%, respectively.
Pax Ellevate Global Women’s Leadership Fund Individual Investor Class (PXWEX - Free Report) seeks returns on investment that exceed the price and yield performance of the Pax Global Women's Leadership Index. The fund invests more than four-fifths of its assets in securities of the components of the Women's index, the likes of which may include American Depositary Receipts, Global Depositary Receipts and Euro Depositary Receipts.
This Zacks sector – Global-Equity product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PXWEX has an annual expense ratio of 0.81%, which is below the category average of 1.10%. The fund has three and five-year returns of 12.1% and 9.1%, respectively.
Calvert Global Water Fund Class A (CFWAX - Free Report) tracks the performance of the Calvert Global Water Research Index. The fund normally invests the majority of its assets in equity securities of domestic as well as foreign companies from the water industries or are involved in water-related service and technologies.
This Zacks sector - Sector-Energy product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here .
CFWAX has an annual expense ratio of 1.24%, which is below the category average of 1.36%. The fund has three and five-year returns of 8.3% and 6.6%, respectively.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>