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Utahns can make cash, keep values

Many Utah investors would never dream of buying stocks or bonds in companies that make or market such products as alcohol and tobacco or promote "services" such as gambling.

Still others want to stay away from companies that pollute the environment, use animals to test their products or have poor records in such things as community involvement, employment equality, human rights and labor relations.

Conversely, these folks want to support companies that have good track records on those issues.

But since most small investors put their money into mutual funds rather than buying securities directly, it's difficult for them to keep track of what they're investing in.

To further muddy the waters, good intentions are often tested against the top priority of all investors: making money. If a fund you own has proven profitable over the years, it creates a moral dilemma to learn that, buried among its "good guy" holdings are some "sinners."

Even worse, mutual funds that have made it their goal to invest only in stocks of socially and environmentally responsible companies have historically not been among the best performers, leaving socially responsible investors caught between their consciences and their need to fund their kids' college educations and their own retirement.

Now that seems to be changing.

Despite the beating that many stock funds took last year, seven of the eight largest "social" funds earned top marks from Morningstar and Lipper Analytical Services, two trackers of mutual fund performance.

According to the Social Investment Forum, based in Washington, D.C., 14 of the 16 funds with assets of $100 million or more screened by those those firms did quite well in the volatile 2000 market which saw the value many Internet and high-tech issues plummet.

The 88 percent of social funds that earned a four-star or five-star rating from Morningstar and an "A" or "B" ranking from Lipper, was up from 69 percent in 1999.

Of the broader group of 48 socially screened funds with a three-year track record approved by the social forum, nearly two thirds of them (31 funds or 65 percent) received high marks from either Lipper or Morningstar last year, up from 57 percent in 1999.

"The data we are seeing provides compelling evidence that socially responsible investing can hold its own in any market environment, including the turbulence of 2000," said forum spokesman Steve Schueth. "Investors wishing to put their money to work in a socially and environmentally responsible way need not fear having to sacrifice returns."

Despite the good performance last year of some social funds, the Domini 400 Social Index under-performed the Standard & Poor's 500 in 2000 but has beaten the S&P for the past 10 years.

Overexposure to the computer hardware industry and underexposure to the energy reserve industry were the major reasons for last year's slippage of the DSI 400, which lost 14.32 percent in 2000 compared to a 9.01 percent decline for the S&P 500. For the 10 years ended Dec. 31, total annualized returns for the DSI 400 was 19.01 percent versus 17.48 percent for the S&P 500.

See? You can have your values and make money, too.

You can check out the performance of 71 socially responsible mutual funds at

Speaking of making money, Salt Lake City-based Equity Oil Co. showed the dot-coms and high-tech companies that the death of the "old economy" has been greatly exaggerated. Equity Oil rode rising crude oil prices last year into record revenues and a 12-fold increase in net income over 1999.

After struggling for much of the '90s through low prices for imported crude, Equity saw its cash flow and reserve values take a major jump in 2000 and was able to reduce its debt by 43 percent.

Last week Equity reported revenues of $25.4 million up 61 percent over 1999 and net income of $5.16 million or 41 cents per share against $404,000 or 3 cents per share in 1999.