Price, Performance Separate These Socially Responsible Funds
Domini Impact Equity and TIAA-CREF Social Choice Equity both have High Morningstar Sustainability Ratings, but Bronze-rated TIAA-CREF fund has the edge.
David Kathman: Domini Impact Equity and TIAA-CREF Social Choice Equity are both socially responsible mutual funds that do a really good job of owning companies scoring well on a variety of environmental, social, and governance, or ESG, issues.
Both of them earn Morningstar Sustainability Ratings of High, and they have sustainability scores in the top 5% of the large-blend category--which is a good thing for investors who want to invest in a sustainable, socially conscious way.
One way these two funds differ is in their performance. Over the past 10 years the Domini fund has trailed about three quarters of the large-blend category, while the TIAA-CREF fund has done quite a bit better, beating about two thirds of the category. Even more importantly, the TIAA-CREF fund is significantly cheaper, with a 0.46% expense ratio for retail shares, as opposed to the Domini fund's 1.14%--more than twice as much. That's a major reason why the TIAA-CREF fund has a Morningstar Analyst Rating of Bronze, while the Domini fund is only rated Neutral.
David Kathman does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.