Earlier this month, a gunman opened fire at Borderline Bar and Grill, in Thousand Oaks, California. Thirteen people were killed, including the shooter. According to data from the Gun Violence Archive, it was the 307th mass shooting in the United States this year.

More Americans now support increased gun control policies. NPR initiated a survey of 1,005 adults. It included 351 Democrats, 341 Republicans and 203 Independents. On February 28, 2018, 92 percent of Democrats favored stricter gun control rules. That was up from 84 percent on October 17, 2017. Fifty-nine percent of Republicans and 68 percent of Independents also wanted stricter rules.

On February 26th, 2018, The New York Times published, You Might Be A Gun Owner, Even If You Don’t Possess A Weapon. Plenty of mutual funds include shares in a wide range of so-called “sin stocks.” They include weapons manufacturers, cigarette companies, alcoholic beverage businesses, casinos and companies associated with pornography. Most index funds include such stocks.

That’s why some investors shun index funds. Instead, they favor specific actively managed funds categorized as socially responsible or sustainable. Such funds don’t include stocks in the aforementioned industries. America’s largest socially responsible fund is The Parnassus Core Equity Fund (PRBLX). Its annual expense ratio is 0.87 percent.

Vanguard’s FTSE Social Index (VFTSX) was the first low-cost challenger. Its annual expenses are 0.2 percent. It also beat The Parnassus Core Equity Fund over the past 3, 5 and 10 year-periods. The Vanguard fund excludes stocks that don’t adhere to certain social, human-rights and environmental criteria. It also excludes companies involved with weapons, tobacco, gambling, alcohol, adult entertainment and nuclear power.

Critics of socially responsible funds, however, say they don’t perform well. But such critics might be wrong. The Parnassus Core Equity Fund, for example, has a strong performance record. Vanguard’s FTSE Social Index might be even better. It beat the S&P 500 over the past 3, 5 and 10-year periods.

Socially Responsible Funds Can Perform Well
Returns Ending November 16, 2018

Fund Average Annual 3-Year Return Average Annual 5-Year Return Average Annual 10-Year Return
The Parnassus Core Equity Fund (PRBLX) 11.13% 10.03% 13.85%
Vanguard’s FTSE Social Index (VFTSX) 12.74% 11.64% 15.76%
Vanguard’s S&P 500 Index (VFINX) 12.18% 10.87% 14.37%

Until recently, Americans couldn’t build a diversified portfolio of socially responsible, low-cost index funds. But an increasing number of investors are warming to these products. Fidelity says, “Demand for sustainable investment opportunities also appears to be particularly high among younger investors. More than 8 in 10 millennials said they were interested in sustainable investing, according to another survey by Morgan Stanley. Given that millennials are expected to have $19 trillion to $24 trillion in assets by 2020, sustainable investing may have some wind at its back.”

That’s why Fidelity and iShares have raised some giant sails. Each firm now has several socially responsible stock and bond market index funds. You might not personally stop gun violence or eliminate global warming. But if socially responsible funds help you sleep at night, these portfolios might be worth it.

Portfolio Models With Fidelity’s Socially Responsible Index Funds

Funds Expense Ratio Conservative Allocation Cautious Allocation Balanced Allocation Assertive Allocation Aggressive Allocation
Fidelity U.S. Sustainability Index Fund (FENSX) 0.11% 15% 25% 30% 40% 45%
Fidelity International Sustainability Index Fund (FNIYX) 0.20% 15% 20% 30% 35% 45%
Fidelity Sustainable Bond Index Fund (FNDSX) 0.10% 70% 55% 40% 25% 10%
Total 100% 100% 100% 100% 100%

Portfolio Models with iShares Socially Responsible Index Funds

Funds Expense Ratio Conservative Allocation Cautious Allocation Balanced Allocation Assertive Allocation Aggressive Allocation
iShares U.S. Sustainable Index (ESGU) 0.15% 15% 25% 30% 35% 40%
iShares International Developed Sustainable Index (ESGD) 0.20% 10% 15% 25% 30% 35%
iShares Emerging Markets Sustainable Index (ESGE) 0.25% 5% 5% 5% 10% 15%
iShares Aggregate Sustainable Bond Index (EAGG) 0.10% 70% 55% 40% 25% 10%
Total 100% 100% 100% 100% 100%

Andrew Hallam is a Digital Nomad. He’s the author of the bestseller, Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas