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Socially Responsible Investment (SRI)

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Definition of 'Socially Responsible Investment (SRI)'

An investment that is considered socially responsible takes into account the nature of the business the company conducts.

Socially responsible attributes for this type of investment will avoid investing in companies that:
Produce or sell addictive substances (like alcohol, gambling and tobacco).
They will seek to invest in companies engaged in environmental sustainability and alternative energy/clean technology efforts.

Socially responsible investments are available as purchasing the stock of socially responsible companies or through a socially conscious mutual fund or exchange traded fund (ETF).

Each year more and more funds following SRI principles become available to invest in and the existing funds grow in size. This is a growth industry and has been so for several years. Mutual funds and ETFs are the most popular way for investors to expose themselves to this type of investment.

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