Hypocritical commentary
I'm sorry you've got a bad impression of Pax World Fund. But if you haven't heard of them before now, I'm sure it's because you've never spent much if any time looking into SRI (Socially Responsible Investing) Mutual Funds. Pax World is the granddaddy of them all; its establishment in 1971 was a key event in the development of the concept of SRI. It currently has about $2 Billion in investments, has a four-star Morningstar Rating, and was ranked as the third largest SRI mutual fund in the nation (according to www.socialinvest.org). I have had a substantial part of my retirement investments in it since 1989, and haven't regretted it at all.
As an investor who apparently has strong opinions on a variety of issues, you should be interested in the concept of underlying SRI: "put your money where your mouth is." Part of it is "don't invest in companies whose policies you disagree with", but, more accurately, it's "invest in the companies whose policies you agree with." That way your financial investments don't silently work against your principles, whatever they may be. Your opinion makes a difference only when you speak out; your investments make a difference 24 hours a day, 365 days a year.
But the sad truth is that few people who invest in mutual funds (even very outspoken people) have any idea what their money is invested in.
You've hit the nail on the head, Ned. Thanks for taking the time to comment.
You had clearly researched and invested in Pax before this occurred.
However, this was my (and who knows how many other people's) first encounter with Pax. And, for me, the way they handled this situation created a negative impression that will be difficult to overcome.
I have an issue with the opportunistic communication. That a positively focused company would choose to jump on a negative bandwagon. That seems counter to their brand.
Rick,
In the process of doing background research on Pax World, I came across your blog. To think that this is the same Pax World who, three years ago, divested $23 million of Starbucks stock for the sin of placing its name on a coffee liqueur. Pax World has different standards these days....
Would you expect the defense contractor AECOM to be one of the investments in the Pax World "peace" socially responsible mutual funds? I wouldn't. And as an investment adviser working with high net worth clients for whom I formulate ethical standards for their investment policies, I was shocked when I saw this in the Pax World funds. Of course, Pax World likes to say that Pax means peace and, in their prospectus, they say that they avoid investing in companies “significantly involved in the manufacture of weapons or weapons-related products.” They state, “our Funds seek to promote peace, reconciliation and international understanding,” and have self-prohibited even from investing in U.S. Treasury bonds. Moreover, Pax World’s ads in publications such as E Magazine and Mother Jones declare: “No Weapons,” “Promote Peace,” “Take the high road” and “Green, Not Greed.”
AECOM Technology is an engineering and defense contractor whose business ranges from managing the U.S. Army’s Fort Polk, including its live-fire target ranges, to operating logistics, training and repair depots for the U.S. military in Iraq, Kuwait and Afghanistan, with more than 6,000 employees working for its CSA subsidiary in Kuwait alone. They are defense contractors repairing and maintaining everything from machine guns to computers to communications equipment to tanks, among other tasks. “Employees at all levels have dedicated themselves to a wide range of assignments, from maintaining tactical equipment such as tanks, to supporting information systems, to conducting force-on-force and live-fire exercise and training programs, to providing security, environmental services, rations, uniforms and even barbed wire, as well as organizing recreational programs and special events for soldiers.” And, yes, the AECOM-CSA depot is the shipping point for ammunition into Iraq.
I bet many of Pax World funds' shareholders are unaware of and unwilling to accept such exposure to the defense industry -- they buy into SRI funds for a reason, to align their investments with their values. They would be shocked, like I was. There is a pressing need for transparency with regard to SRI mutual funds across many dimensions, at the least additional disclosure about what sorts of companies they own and why they own them.
So, you see, Pax World must have taken coffee and liqueur more seriously....
Hopefully, the blog I recently created SRIgreen.com will create a forum and collaborative homebase for public scrutiny within green SRI mutual funds. Also, if you'd like to join our petition for Pax World to divest war contractors, email me at SRIgreen@pennyfarthinginvestment.com
Commenting by HaloScan.com
