Free Annual Reports
Green Funds For The Faint Of Heart
I believe that we all have a responsibility to keep the Earth clean and inhabitable for the next generation, and that responsibility spills over to our investing habits. But I'm also a realist.
I don't think it makes sense to invest in an environmentally friendly company unless it has excellent growth potential or some other valuable assets that could enhance shareholder value. With that in mind, we're going to examine two mildly green mutual funds that reward green efforts without forgetting about the bottom line. (For some background on green investing, check out What Does It Mean To Be Green?)
Portfolio 21 (PORTX)
The fund takes its name from its goal to "address the ecological risks and opportunities of the investment process in the 21st century." Portfolio 21 focuses on companies that invest in and work to save our natural resources, or companies who sell products that create what the company calls a "sustainable society". But don't get these guys and gals wrong. The management team doesn't spend its time sitting around campfires singing Bob Dylan songs. Instead, the fund researches and invests its $266 million in assets in viable companies that most of us have heard of.
Some of its top holding include corporate stalwarts: Nokia (NYSE:NOK), Novartis (NYSE:NVS), Canon (NYSE:CAJ), IBM (NYSE:IBM), Siemens (NYSE:SI) and Staples (Nasdaq:SPLS).
So, how does this fund's green investment philosophy wash with its big-name portfolio holdings? The above-mentioned companies are among the leaders in their fields and are known to be working to reduce their impact on the environment.
Let's look at Nokia as an example: Portfolio 21 classifies Nokia as a green company because it's not using PVC in its new battery chargers. Also, Nokia phones come in under the efficiency limits set by the government's Energy Star program, and Nokia is also pushing the recyclability of some of its components. (Are these moves truly for the good of the planet, or another case of corporate greenwashing? To learn more, see The Green Marketing Machine.)
Since its inception in 1999, Portfolio 21 has generated an annual return of 7.36%. During that same time the MSCI World Equity Index sported a return of 5.32%, and the S&P 500 Index a 3.33% return.
Fees
Its net expense ratio is 1.52%. There is also a 2% redemption fee for shares held less than 60 days. The minimum investment is $5,000 for a standard account and $1,000 for an individual retirement account (IRA).
Green Century Equity Fund (GCEQX)
The Green Century Fund buys shares of companies that appear to be good corporate citizens, and it purposely excludes companies that have a bad record with regard to toxic emissions, and waste disposal. It also generally shies away from companies that are engaged in gaming, alcohol and tobacco industries.
Like Portfolio 21, Green Century's management team doesn't go overboard. The fund has invested in solid companies with good balance sheets and longer-term growth potential. Its top holdings as of December 31 included a few companies you may have heard of including: Microsoft (Nasdaq:MSFT), AT&T (NYSE:T) and Procter & Gamble (NYSE:PG).
The fund buys into companies that are generally, as the company puts it, "leading the way toward a greener future". It also views favorably companies that have a record of environmental friendliness.
The fund attempts to track the Domini 400 Social Index, which is a popular benchmark for socially responsible investments. Over the last 10 years, the fund has done pretty well, generating an average annual total return of 4.12% as of December 31, 2007.
Fees
The annual fund operating expense ratio is 0.95%. The minimum initial purchase for a regular account is $2,500, and for an IRA its $1,000.
Bottom Line
Socially conscious investing can still be a profitable venture. For those looking to do a little research on environmentally conscious funds, Portfolio 21 and the Green Century Equity Fund are a good place to get your feet wet.
To learn more about green investing, check out Evaluating Green Equity Investments.
I don't think it makes sense to invest in an environmentally friendly company unless it has excellent growth potential or some other valuable assets that could enhance shareholder value. With that in mind, we're going to examine two mildly green mutual funds that reward green efforts without forgetting about the bottom line. (For some background on green investing, check out What Does It Mean To Be Green?)
Portfolio 21 (PORTX)
The fund takes its name from its goal to "address the ecological risks and opportunities of the investment process in the 21st century." Portfolio 21 focuses on companies that invest in and work to save our natural resources, or companies who sell products that create what the company calls a "sustainable society". But don't get these guys and gals wrong. The management team doesn't spend its time sitting around campfires singing Bob Dylan songs. Instead, the fund researches and invests its $266 million in assets in viable companies that most of us have heard of.
Some of its top holding include corporate stalwarts: Nokia (NYSE:NOK), Novartis (NYSE:NVS), Canon (NYSE:CAJ), IBM (NYSE:IBM), Siemens (NYSE:SI) and Staples (Nasdaq:SPLS).
So, how does this fund's green investment philosophy wash with its big-name portfolio holdings? The above-mentioned companies are among the leaders in their fields and are known to be working to reduce their impact on the environment.
Let's look at Nokia as an example: Portfolio 21 classifies Nokia as a green company because it's not using PVC in its new battery chargers. Also, Nokia phones come in under the efficiency limits set by the government's Energy Star program, and Nokia is also pushing the recyclability of some of its components. (Are these moves truly for the good of the planet, or another case of corporate greenwashing? To learn more, see The Green Marketing Machine.)
Since its inception in 1999, Portfolio 21 has generated an annual return of 7.36%. During that same time the MSCI World Equity Index sported a return of 5.32%, and the S&P 500 Index a 3.33% return.
Its net expense ratio is 1.52%. There is also a 2% redemption fee for shares held less than 60 days. The minimum investment is $5,000 for a standard account and $1,000 for an individual retirement account (IRA).
Green Century Equity Fund (GCEQX)
The Green Century Fund buys shares of companies that appear to be good corporate citizens, and it purposely excludes companies that have a bad record with regard to toxic emissions, and waste disposal. It also generally shies away from companies that are engaged in gaming, alcohol and tobacco industries.
Like Portfolio 21, Green Century's management team doesn't go overboard. The fund has invested in solid companies with good balance sheets and longer-term growth potential. Its top holdings as of December 31 included a few companies you may have heard of including: Microsoft (Nasdaq:MSFT), AT&T (NYSE:T) and Procter & Gamble (NYSE:PG).
The fund buys into companies that are generally, as the company puts it, "leading the way toward a greener future". It also views favorably companies that have a record of environmental friendliness.
The fund attempts to track the Domini 400 Social Index, which is a popular benchmark for socially responsible investments. Over the last 10 years, the fund has done pretty well, generating an average annual total return of 4.12% as of December 31, 2007.
Fees
The annual fund operating expense ratio is 0.95%. The minimum initial purchase for a regular account is $2,500, and for an IRA its $1,000.
Bottom Line
Socially conscious investing can still be a profitable venture. For those looking to do a little research on environmentally conscious funds, Portfolio 21 and the Green Century Equity Fund are a good place to get your feet wet.
To learn more about green investing, check out Evaluating Green Equity Investments.
by
Glenn Curtis
Glenn Curtis started his career as an equity analyst at Cantone Research, a New Jersey-based regional brokerage firm. He has since worked as an equity analyst and a financial writer at a number of print/web publications and brokerage firms including Registered Representative Magazine, Advanced Trading Magazine, Worldlyinvestor.com, RealMoney.com, TheStreet.com and Prudential Securities. Curtis has also held Series 6,7,24 and 63 securities licenses.
Free Annual Reports
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=031bd62125f4dbdc84d6010ab1958bb7
