There are two fundamental approaches to socially responsible investing. Most such funds simply shun companies with poor environmental track records or morally dubious lines of work. But other funds take a more positive approach, seeking out businesses that exemplify the best qualities of social responsibility. The Pax Global Women's Equality Fund (FUND: PXWEX) is one of the latter.

The top of the heap
According to its prospectus, the Pax fund seeks companies that promote gender equality and women's advancement, particularly those that embody the United Nations' best practices for women's empowerment.

The fund's holdings include several leading companies making big strides in different areas of gender equality:

  • Leadership roles. Women still don't have equal representation on most corporate boards, but Statoil (NYSE: STO) comes close; four of its 10 board members are women. Four members of Pfizer's (NYSE: PFE) executive leadership team are women as well, and the company is pushing for more women in management globally.
  • Benefits. Employee benefits for women are important. Johnson & Johnson (NYSE: JNJ) has ranked among Working Mother's "Top 100 Companies for Working Mothers" for 24 years in a row. Google (Nasdaq: GOOG) offers generous benefits supporting mothers and families.
  • Development. It's important to empower women now, but equally vital to ensure that they'll be empowered in the future. Blackrock (NYSE: BLK) offers workshops for women student leaders.

Doing good vs. doing well
Just remember that when it comes to hard numbers, socially responsible investments can come with a downside. Seeking only the very best companies by these criteria could lead you to exclude companies that might be merely adequate at social responsibility, but superb as potential investments. Still, many ethically motivated investors are willing to make that trade-off, and it's hardly improbable that a company might do well financially by doing good socially.

If you don't want to pore through funds and companies to pick out candidates that exemplify the values you support, a socially responsible mutual fund can make it far easier to devote your dollars to investments that champion your favorite causes. Just make sure that any fund you choose charges reasonable fees, and provides a strong track record in return.

Unfortunately, a closer look at the Pax Global Women's Equality Fund reveals that it isn't quite an automatic buy. At 1.24%, its expense ratio is a little higher than I'd like to see, and its performance also leaves something to be desired. On the plus side, its minimum investment amount is a very low $250, making it very accessible. Sujatha Avutu has been responsible for managing the fund only since 2007, so we shouldn't blame her for its past lackluster performance. In her previous post at Evergreen Equity Income (ETRAX), she amassed a market-beating record in the few years before she left. That leaves me with higher hopes for the Pax fund's future. For now, though, it has yet to prove itself.

Investing according to your values is possible. Just make sure you find the right investments to do it.