Stacking Up Green Funds

Every category of investment has under-performed over the last several years, so it is difficult to be excited about retirement planning.  Maybe a fresh approach is needed to keep it interesting and to get the portfolio going in a better direction.

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:
Locate promising Green Funds, summarize holdings and long-term performance...

Are there any salient Green Funds to consider?


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.

Holding	PORTX	FSLEX	GCBLX	SPEGX
Top-1st	Google	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,
Triple E.