Question: I'd like to invest in a green mutual fund, one that develops wind and solar energies, electric cars etc. I've been looking at Winslow green growth. Any thoughts or suggestions? Kate, Sheridan, WY

Answer: I looked up the Winslow Green Growth fund on the www.morningstar.com website. As of writing this column, the fund's year-to-date return was down -22.50%. Its one-year return is -5.60% and its 5-year return annualized is 17.73%. Its net expense ratio is 1.45%, which is on the high side. (According to Morningstar fees on green funds range between 1.25% and 1.98%.)

I typically prefer index funds that cover a range of industries and charge low fees, and there are a number of "green" index funds. Once you've created a broadly diversified portfolio and you then want to place a bet on a sector or a fund or a company with a small percentage of your portfolio, well, by all means go ahead--have some fun. If you're interested in doing more research about socially responsible investing two good websites are www.socialinvest.org and www.socialfunds.com.

The biggest rap against the movement is the belief that marrying personal values to an investment portfolio cuts into returns. In other words, doing good and making money don't mix. I don't agree. A number of studies suggest there's little difference between pooling money to make money and pooling money to make money and express values. This came home to me in a series of papers by Meir Statman, a finance economist at Santa Clara University. Among his conclusions, the risk-adjusted return on socially conscious index funds is roughly comparable to the Standard & Poor's 500 index and the performance of actively managed socially responsible mutual funds is about equal to their conventional mutual fund peers. (You can read his papers on the subject at www.scu.edu/business/finance/research/sristatman.cfm.)

One note of caution: Socially responsible funds tend to have high fees that cut into returns. So while it always pays to shop around it's especially true in this industry.

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