But according to a recent Missouri State University study, over the past 10 years such funds have beaten regular funds in two categories: balanced and fixed income and balanced (which hold stocks and bonds).
"The limitations created by [socially conscious] investing may have less of an effect because these categories are already more conservative," says study co-author C. Edward Chang.
Morningstar's David Kathman names two standout choices:
Pax World Balanced (One-year return: 13.1%; expense ratio: 0.96%) invests in stocks and bonds of companies that hew to strict environmental and workplace safety standards.
CRA Qualified Investment (One-year return: 3.1%; expense ratio: .96%) holds bonds that support affordable housing or promote development in low-income areas.