Socially responsible investing

Yes to definition of negative screen. No to style bias not a concern because fund indexed to S&P.

L3BeatIt Wrote: ------------------------------------------------------- > Yes to definition of negative screen. Agree - I think, I don’t remember this part clearly > No to style bias not a concern because fund > indexed to S&P. Disagree - It will be biased toward growth stocks.

it has style bias, will bias to small cap. so your answer should be right

agree with dwight

Style bias - SRI over allocates to small cap growth.

you are both right. L3BeatIt means the answer to that sentence is no(wrong). means wrong.

Dwight Wrote: ------------------------------------------------------- > L3BeatIt Wrote: > -------------------------------------------------- > ----- > > Yes to definition of negative screen. > > Agree - I think, I don’t remember this part > clearly > > > No to style bias not a concern because fund > > indexed to S&P. > > Disagree - It will be biased toward growth stocks. My wording was poor. Agree and then disagree were the answers.

Haha yeah I read his double negatives wrong.

is SRI strategy allowed to be in it’s own composite?

yes on own composite.

SRI is not a Non-Discretionary restriction?

My understanding was that the small firm/growth bias with negative SRI screens was due to small firms being more likely to have better practices AND exhibiting above average growth rates. Now the S&P 500 constitutes the largest 500 firms in the US. Had the benchmark been the Russell 3000 I would buy the bias argument. It explicitly said given this benchmark. I think the answer was A yes. Both statements correct. But then again I work in Fixed Income.

The Dark Knight Wrote: ------------------------------------------------------- > My understanding was that the small firm/growth > bias with negative SRI screens was due to small > firms being more likely to have better practices > AND exhibiting above average growth rates. > > Now the S&P 500 constitutes the largest 500 firms > in the US. Had the benchmark been the Russell 3000 > I would buy the bias argument. It explicitly said > given this benchmark. I think the answer was A > yes. Both statements correct. > > But then again I work in Fixed Income. SRI screens have the biases, however the S&P is indeed large cap… so it cant have the small bias associated with it…my 2 cents

Fair dos I’m not going to argue. I understood the firms were being picked from the S&P universe. But clearly must have missed something.

sri firms have growth bias as well…

s&p 500 is a growth index-

S and P 500 is a core index with ~500 names; S&P 500 growth index is a growth index with 289 names (symbol SGX) and S&P 500 Value index is a value index (SVX) with 371 names…there is overlap obvioulsy

Page 222 Vol. 4. Growth bias from negative screening

Were those 2 in one question in the PM?

The Dark Knight Wrote: ------------------------------------------------------- > My understanding was that the small firm/growth > bias with negative SRI screens was due to small > firms being more likely to have better practices > AND exhibiting above average growth rates. > > Now the S&P 500 constitutes the largest 500 firms > in the US. Had the benchmark been the Russell 3000 > I would buy the bias argument. It explicitly said > given this benchmark. I think the answer was A > yes. Both statements correct. > > But then again I work in Fixed Income. I thought the exactly same way. If Index was Russell 3000 then there would be style bias but since the benchmark is small and constitutes largest companies there wouldnt be style bias. Here’s the thing as well…Why would CFAI choose to use S&P 500 in this question instead of Russell 3000? I think the reason is that they already figured people were pre-conditioned to believe the negative SRI = growth bias, so they put S&P to f*ck with our heads. They are @ssholes!!!