Portfolio Creation

Asset allocation is the cornerstone of any investment plan, including one that is socially responsible. Before you decide to work SRI into your portfolio, it's important to consider its shortcomings, notably in the emerging markets asset class. Emerging markets investments are focused in developing countries, where many companies don't meet SRI criteria.

The challenges of diversifying, however, shouldn't deter you from pursuing SRI. To ensure that your portfolio is balanced, a good strategy might be to select only one—or a few—investments that adhere to strict SRI criteria. As always, it's wise to refrain from putting all your eggs in one basket, even if it's a socially responsible basket.