Even after more than three decades of its start as a lucrative investing option, Socially Responsible Investing (SRI) still is not the preferred investing choice for many and is yet to find a suitable place in the mainstream investment arena. Of late, it has been observed that the objective of doing good to the society by investing in a socially responsible fund often results in more costs to the investors than what they actually anticipate. That is to say that their actual costs of investing are a little bit higher than the expected costs.

Recently a research study was done by two Wharton finance professors, Robert F Stambaugh and Christopher C Greczy on the sustainability and profitability in returns of socially responsible funds. According to the findings of the study, being socially responsible is sometimes costly and sometimes not so costly. It all depends on the nature of the fund being invested. The returns also depend on the efficiency and knack with which a SRI fund manager screens and tracks the performance of the `socially good stocks' in which SRI is made. The biggest setback of the SRI funds, according to the research is that there is little scope for diversifying (because of screening effect on the stocks) the risks involved and hence the lesser is the returns.

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