1. A strategy for financial growth
The numbers speak for themselves The SRI industry continues to grow — from the number and variety of funds offered, to the amount of assets invested.

According to the Social Investment Forum’s 2003 Report on Socially Responsible Investing Trends in the U.S., one in every nine dollars invested in the U.S. uses an SRI strategy. The study also cites in 2001 and 2002, the number of SRI portfolios grew 7% while the number of non-SRI portfolios fell 4%.

Managing risk A core SRI strategy is to seek competitive long-term returns by investing in socially responsible companies in an effort to reduce downside risk. SRI analysts and investment managers conduct extensive research into the corporate, social and environmental performance of the companies considered for investment. This broad focus unearths potential risks that balance sheets and income statements alone cannot show.

Finding opportunity SRI analysis does more than identify red flags — it spots white knights. A deep examination of companies considered for investment often uncovers business practices that are thoughtful and progressive, and also may contribute positively to long-term investment performance.

2. Screening to match your values
The hallmark of Citizens’ SRI strategy – and what sets ours apart from other strategies – is the integration of traditional fundamental analysis with our in-depth assessment of select social and environmental factors.

Social filters Citizens' portfolio managers employ various screens to build investment portfolios that seek to match their clients’ values. Many SRI managers employ one or more exclusionary screens to eliminate companies that produce an undesired product, such as alcohol, tobacco or weapons. At Citizens we take the process a step further by employing qualitative screens, to help identify companies that:

• Demonstrate sound and ethical business practices
• Exhibit good corporate citizenship
• Possess forward-thinking management teams
• Maintain progressive hiring, employment and community practices

While no investment is ever made for social reasons alone, we believe our screening process provides a unique and more comprehensive view of the companies we consider for investment. We believe evaluating a company’s record of corporate responsibility helps us minimize investment risk and contributes to investment success by identifying more forward-thinking and potentially more promising companies.

Finding your match Like any diligent investor, you should look for an SRI manager whose investment process is rooted in strong fundamental analysis. Equally important, you should seek an SRI advisor whose values dovetail with your own. Look for someone whose social screens reflect the issues and
values you care about most.

You can get started today by opening an account, or contacting us for more information.

3. Shareholder activism
The terms “investing” and “shareholder value” have meaning beyond the purely financial. As part owners of the companies in which they invest, many SRI shareholders work to encourage companies to improve their corporate, social and environmental practices.

The power of the proxy If you hold direct investments in companies, you are probably familiar with proxy statements. Don’t throw them away! You are entitled to cast your vote on proposals that are submitted for shareholder approval at annual and special meetings. When read carefully, proxy statements can reveal whether management’s interests coincide or conflict with shareholders’ interests.

Banding together with like-minded investors greatly increases the power of the single proxy voter. This is what happens when you invest in an SRI mutual fund. The chorus grows stronger still when different SRI funds work in concert with one another and join forces with large pension funds, state treasurers’ offices and non-profit organizations that share a common interest.

Ideally companies will choose to listen to and work with shareholders to address social, environmental and corporate governance issues. Better still are those instances where shareholder resolutions are withdrawn or are never filed in the first place because management agrees to move forward on shareholder concerns.

At Citizens, the power of the proxy is very important and a responsibility we take very seriously. If you want to know more about our policies for voting on behalf of Citizens Funds shareholders, view our voting guidelines and take a look at our voting record.

4. Community investing
Corporations can and should contribute to their local communities. If you are a shareholder, either directly or indirectly through a mutual fund, you can be an active force in steering that company’s community investment efforts and dollars.

Many companies make modest charitable contributions, but SRI investors often look for more than this. The SRI investment screening process can identify companies making a real difference for their communities. For example, community banks, quasi-governmental entities and credit unions often help support affordable housing, job creation and lending to minority and women entrepreneurs.

Companies can demonstrate good corporate citizenship in a number of ways. Local organizations and charities may benefit from the donation of unique goods and services, or even volunteerism.