The growing importance of sri in the investment arena has resulted in considerable academic interest in the performance of socially responsible equity mutual funds. Remarkably, no attempts have been made to evaluate the performance of mutual funds that invest in socially responsible fixed-income securities. This study fills that gap by measuring the performance of socially responsible bond and balanced funds relative to matched samples of conventional funds, over the period 1987–2003. Using multi-index performance evaluation models, we show that the average sri bond fund performed similar to conventional funds, while the average sri balanced fund outperformed its conventional peers by more than 1.3% per year. The expenses charged by sri funds, match those charged by conventional funds and, evidently, do not cause sri funds to underperform.