Ethical, Meritas top second annual SRI fund rankings

(February 6, 2004) Ethical’s Canadian Dividend Fund and the Meritas Jantzi Social Index Fund took top spots in the second annual survey of socially responsible (SRI) mutual funds in Canada, produced by Corporate Knights magazine.

Researchers looked at nearly 50 SRI funds, rating them on both one-year performance and social factors, including research, community investment and engagement and disclosure of proxy voting policies.

Ethical’s Canadian Dividend Fund received an 83% social rating and 85% on performance while the Meritas Jantzi Social Index Fund got a 93% social score and 72% on performance.

Acuity Funds also fared well in the survey. Acuity’s Clean Environment Balanced Fund finished third overall and the Acuity Social Values Canadian Equity was the top performer, with a one-year return of 41.8%.

Perhaps surprisingly, Mackenzie Financial — with only one SRI fund in its lineup — received the highest social score for its Universal Sustainable Opportunities Fund, managed by Henderson Global Investors.

“It’s my sense they did a lot of research to find the best global money manager that incorporates SRI in the investment process,” says Corporate Knights publisher Toby Heaps.

Real Assets was also strong on the social side, but was not rated high overall because their two funds don’t have a one-year history. Ethical’s Special Equity Fund was the top performer over five years, at 18%. Meritas was rated number one in both the bond and money market fund categories.

Heaps says Corporate Knights changed the methodology for its survey this year, raising the performance weighting from 33% to 50% and reducing the emphasis on screening.

“We took away the focus on the number of screens and that had a huge effect on firms that have a more positive screening focus,” he explains.

Last year, Ethical and Meritas dominated the survey, placing eight funds in the top 10.

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com