Several years ago, Triple E adjusted retirement investments to include a greater proportion of funds featuring environmentally responsible organizations (aka Green Funds). This was, in a sense, an alignment between heart and portfolio. Because many Green Funds now have a 10-yr plus track record, it is time to revisit and compare them.
General strategies employed by Triple E when planning retirement investments: (1) start contributing to 401K, IRA, or SEP as soon as possible, (2) view retirement investment as a marathon not a sprint, (3) invest based on 5-yr to 10-yr past performance, (4) accept risk/volatility inversely proportional to age at time of investment, (5) consider no-load funds over funds with a load or service fees, and (6) increase % of pre-tax income contributed each time you get a pay raise from employer.
After a tour of many unnamed blogs and online articles, it was disappointing to see that performances were rarely reported. Upon examination of the so-called 'Top Green Funds,' many were losing value faster than a typical index fund. This is not to say that good ones aren't out there (see below), but rather a criticism of those writing articles without showing any data.
Triple E Agent Assignment:Are there any salient Green Funds to consider?
Locate promising Green Funds, summarize holdings and long-term performance...
Past performance of numerous funds were examined using online Fidelity search and 'compare chart' tools.
Disclaimer: 'Past performance is not indicative of future results' and consult a financial professional before making investment choices.Four funds are shown in the chart below, in no particular order. Fund names and symbols are as follows: Portfolio 21 Fund Class R (PORTX), Fidelity Select Environment and Alternative Energy Portfolio (FSLEX), Green Century Balanced Fund (GCBLX), and Alger Green A Fund (SPEGX).
|Hypothetical Value of $10,000 Invested 10 Years Ago (Source: Fidelity)|
You can see from the chart above that Triple E only included funds that would have increased from an initial value of $10,000 to $17,500 or more over the last 10-yrs. The value of FSLEX increased at the lowest rate (~5.8% per year), while PORTX increased at the highest rate (~8.4% per year). These values were not adjusted for loads or fees. Approximate percent increase may not be an indicator of what the future holds, see disclaimer above, but it seems like we can have hope when investing in Green Funds.
Please keep in mind that, in general, these funds 'invest primarily in common stocks of companies that the fund manager believes are leaders in managing environmental risks and opportunities.' Google, IBM, and Apple Inc are examples of such companies that are commonly among the funds' Top 10 holdings tabulated below.
|Top-1st||Danaher Corp||Apple Inc||Apple Inc|
|2nd||Novo Nordisk||Emerson Elec Co||Minerals Tech Inc||Google Inc|
|3rd||Roche Holding||Air Products & Chemicals Inc||Nordstrom Inc||Coca-Cola Comp|
|4th||Samsung Electronics||Republic Services Inc||IBM||Amazon.com Inc|
|5th||Novartis AG||Iberdrola SA||Costco Wholesale Corp||IBM|
|6th||Baxter International||Ashland Inc||Baxter Intl Inc||Johnson & Johnson|
|7th||IBM||Stericycle Inc||Cisco Systems Inc||Pfizer Inc|
|8th||Svenska Cellulosa||Ecolab Inc||Wells Fargo & Comp||Discovery Comm. Inc|
|9th||Apple Inc||Ingersoll Rand Inc||General Mills Inc||Procter & Gamble Comp|
|10th||Novozymes||Eaton Corp PLC||AFLAC Inc||ITC Holdings Corp|
The intent of this article was to explore mutual funds that are suitable, in the author's opinion, as long-term low-risk investment options. For more specifics about individual Green Stocks, you may enjoy this article Top 10 Green Stocks. Some of the Top 10 holdings above appear on the individual Green Stock list too.
Views expressed by Triple E should not be interpreted as an endorsement, or approval of any organization nor as recommendation to buy, sell, or hold any particular securities.Proceed with Caution,