Mutual fund giant Vanguard Group is teaming up with Bethesda-based Calvert Group to offer a "socially responsible" index fund.

Calvert, a longtime leader in socially responsible investing, is creating the index, which it hopes to have ready next spring. It will consist of companies selected from among the 1,000 largest U.S. firms and screened for performance on environmental, workplace, human rights, product safety and weapons issues.

The resulting index will avoid companies involved with products such as alcohol, tobacco and weapons, and those that have poor records on workplace safety, the environment and human rights.

Because it is so large and well known, Vanguard's involvement "has huge implications for social investing," said Calvert spokeswoman Elizabeth Laurienzo. Vanguard's participation "pretty much validates the demand for this," she added.

Laurienzo said that Vanguard will license the index, and that Calvert will also bring out a fund based on it. Both Vanguard and Calvert expect to have their funds in operation next year. Calvert's index fund, like other Calvert funds, will be sold through brokers and financial advisers. Vanguard sells its funds directly to investors.

Vanguard has "been looking at starting a social fund for years. There has been interest from individual shareholders and from corporate retirement plans. . . . But we could not find a way that made sense to us," Vanguard spokesman Brian Mattes said.

"We wanted to do this on an index approach and there simply wasn't an index available," he said.

Mattes said the new index is all quantitative and has very broad, clear criteria, and thus has "all the right attributes and solved all the concerns."

Laurienzo said Calvert expects to end up with about 600 companies in the index. She said Calvert does not expect to see much turnover in it--an important feature for tax-sensitive investors.

Index funds, in addition to having low management fees, typically are tax-efficient because operators buy or sell stocks only when they move into or out of the index. This minimizes realized capital gains, which must be distributed annually to investors and creates taxable income, other than for 401(k) and other tax-deferred or tax-exempt vehicles.