Model Portfolios
The SRI Committee has been charged to develop hypothetical model portfolios that exemplify approaches to sustainable and responsible investing. The Committee has developed two such portfolios. The first takes a general SRI-oriented approach, and the second focuses specifically on environmental responsibility and sustainability.
These model portfolios are provided for informational purposes only. The SRI Committee does not endorse any specific fund or combination of funds.
Considerations for Model Portfolio Development
The committee set a basic investment goal of preserving capital while earning modest returns, appreciation and/or growth, with low to moderate risk and an SRI focus. The committee charter required a focus on established funds; the committee interpreted this to mean funds having an inception date before January 1, 2011 whenever possible.
The committee mirrored broad guidelines on allocation (weighting of funds in the portfolios), and used the following general investment guidelines to refine the number of funds considered for each portfolio.
- Diversity of asset classes (within or across funds)
- Diverse geographic coverage (within or across funds)
- Diversity in market capitalization (within or across funds)
- No-load funds or funds that can be accessed without loads in an investment advisory account
- Low fees (.75% or less if possible)
- Low fund turnover (20% or less if possible)
These guidelines minimize risk through diversification and keep the fees and costs of the investment as low as possible to maximize returns.
Using the Model Portfolios
These two models are presented for informational purposes only. Each parish or organization must determine for itself what aspects of SRI, if any, are important within the context of its risk tolerance, investment time horizon, fiduciary responsibilities, and church policy.
The standard investing caveats are provided here as words of caution.
- All investing involves risk, including the risk of loss. Look at each investment in light of your risk tolerance, time horizon, and overall investment strategy.
- Only you can determine if SRI is appropriate for your investment goals.
- Before investing, you should read the prospectus carefully.
- You should carefully consider a fund's investment objectives, risks, charges and expenses before investing.
- Past performance is no guarantee of future results.
- Diversification does not guarantee a profit or protect against market losses.
- Individual investors should not view any information on this website or in these charts as investment advice or recommendations.
- If investment advice is needed, financial entities such as mutual fund companies or investment professionals should be used to make investment decisions.
To track the performance of the funds in the two model portfolios, go to the respective mutual fund company websites or to investment analysis websites, or see the Forum for Sustainable and Responsible Investment’s mutual fund performance chart, Mutual Fund Performance Chart | US SIF.
To compare the model portfolios with the performance of the Diocesan Investment Fund, see the monthly investment reports from the Diocesan Investment Committee.
Model Portfolio 1: General SRI Approach
This portfolio consists of four funds, each of which adheres to specific SRI criteria.
|
Fund Name |
Ticker |
Type |
Weight |
|---|---|---|---|
|
TIAA-CREF Social Choice Equity |
TICRX |
Large & mid blend |
45% |
|
Ariel Fund |
ARGFX |
Mid to small cap |
15% |
|
Pax MSCI EAFE ESG Index |
PXINX |
Foreign large blend |
15% |
|
TIAA-CREF Social Choice Bond |
TSBRX |
Intermediate term bond |
25% |
For information on these funds, go to the respective company websites:
- TIAA-CREF Social Choice Equity (TICRX)
- Ariel Fund (ARGFX)
- Pax MSCI EAFE ESG Index (PXINX)
- TIAA-CREF Social Choice Bond (TSBRX)
The following three charts provide information on the performance of this model portfolio over time. The first is a table that shows model portfolio performance through the first three quarters of 2016 (January 1 - September 30), assuming a notional investment start date of 1 January 2016 and a starting investment total of $10,000. The second and third provide graphic representations of performance through August 2016.
| Fund name | 2016 YTD (3Q) Returns | 2015 Returns | Starting Investment at 1/1/2016 | Value at 9/30/2016 |
|---|---|---|---|---|
| TIAA-CREF Social Choice Equity | 8.80% | -2.70% | $4,500.00 | $4899.36 |
| Ariel Fund | 7.25% | -4.10% | $1,500.00 | $1608.87 |
| Pax MSCI EAFE ESG Index | 0.80% | 0.91% | $1,500.00 | $1,477.41 |
| TIAA-CREF Social Choice Bond | 5.61% | 0.90% | $2,500.00 | $2,640.25 |
| Model Portfolio Total | 6.50% | -1.47% | $10,000.00 | $10,636.87 |
| S&P 500 | 7.84% | 1.83% | $10,000.00 | $10,785.21 |
| Dow Jones Industrial Avg | 5.07% | -2.23% | $10,000.00 | $10,507.00 |
Model Portfolio 2: Environmental Focus
Many environmentally oriented investors are choosing low carbon or fossil fuel portfolios. Investors may choose these strategies in order to invest consistently with their moral/religious beliefs and also as part of the broader divestment movement’s effort to discredit the fossil fuel industry’s efforts to influence public opinion. Supporters of fossil-fuel-free investing also hope to drive more capital into research and development of renewables.
A specific focus on reducing fossil fuel holdings or divesting from them completely may involve several steps:
- Reducing or eliminating direct investments in fossil fuel companies.
- Identifying investment products such as mutual funds that include fossil fuel investments, and moving to those that do not. The Fossil Free Funds site provides an online tool for determining the fossil fuel exposure of mutual funds.
- Identifying the degree to which the current banking and credit card companies invest in fossil fuels, and potentially moving bank accounts and credit cards to a community development bank or credit union that is fossil-fuel free.
The environmentally focused model portfolio consists of ten funds, each of which takes environmental factors into consideration in selecting companies to invest in. In several cases the funds have an even more targeted environmental purpose. Although not included in this portfolio, the Pax Global Environment Fund (PGRNX) may also be of interest to green investors.
| Fund Name | Ticker | Type | Weight |
|---|---|---|---|
| Calvert Large Cap Core Responsible Index | CISIX | Large cap | 22% |
| Parnassus Endeavor (fossil fuel free) | PFPWX | Large cap | 8% |
| Calvert Mid Cap Index Fund | CMJIX | Mid cap | 10% |
| Parnassus Mid Cap Fund | PFPMX | Mid cap | 5% |
| Pax MSCI EAFE ESG Index | PXINX | Foreign large blend | 10% |
| iShares Global Clean Energy | ICLN | Sector fund | 5% |
| TIAA-CREF Social Choice Bond | TSBIX | Intermediate term bond | 13% |
| Calvert Bond Fund | CBDIX | Intermediate term bond | 12% |
| CRA Qualified Fund | CRANX | Intermediate government | 10% |
| Calvert Green Bond Fund | CGBIX | Intermediate term bond | 5% |
For information on these funds, go to the respective company websites:
- Calvert Large Cap Core Responsible Index (CISIX)
- Parnassus Endeavor (PFPWX)
- Calvert Mid Cap Index Fund (CMJIX)
- Parnassus Mid Cap Fund (PFPMX)
- Pax MSCI EAFE ESG Index (PXINX)
- iShares Global Clean Energy (ICLN)
- TIAA-CREF Social Choice Bond (TSBRX)
- Calvert Bond Fund (CBDIX)
- CRA Qualified Fund (CRANX)
- Calvert Green Bond Fund (CGBIX)
The following four charts provide information on the performance of this model portfolio over time. The first is a table that shows model portfolio performance through the first three quarters of 2016 (January 1 - September 30), assuming a notional investment start date of 1 January 2016 and a starting investment total of $10,000. The second, third, and fourth provide graphic representations of performance through August 2016.
| Fund name | 2016 YTD (3Q) Returns | 2015 Returns | Starting Investment at 1/1/2016 | Value at 9/30/2016 |
|---|---|---|---|---|
| Calvert Large Cap Core Responsible | 6.94% | 1.14% | $2,200.00 | $2,352.65 |
| Parnassus Endeavor | 13.30% | 3.39% | $800.00 | $906.56 |
| Calvert Mid Cap Index Fund | 10.13% | N/A | $1,000.00 | $1,099.52 |
| Parnassus Mid Cap Fund | 13.71% | -0.65% | $500.00 | $568.59 |
| Pax MSCI EAFE ESG Index | 0.80% | 0.91% | $1,000.00 | $984.94 |
| iShares Global Clean Energy | -5.16% | 2.77% | $500.00 | $473.48 |
| TIAA-CREF Social Choice Bond | 5.61% | 0.90% | $1,300.00 | $1,372.93 |
| Calvert Bond Fund | 6.50% | 0.54% | $1,200.00 | $1,277.73 |
| CRA Qualified Fund | 3.57% | 2.01% | $1,000.00 | $1,034.35 |
| Calvert Green Bond Fund | 6.10% | 0.19% | $500.00 | $530.55 |
| Model Portfolio Total | 6.16% | 1.11% | $10,000.00 | $10,613.38 |
| S&P 500 | 7.84% | 1.83% | $10,000.00 | $10,785.21 |
| Dow Jones Industrial Avg | 5.07% | -2.23% | $10,000.00 | $10,507.00 |
An Investing Alternative: Community Impact Investing
Community impact investing typically funds affordable housing, microfinance, and other community development projects, including international development and women's empowerment projects (primarily in developing countries). It produces a direct, measurable, and major positive social impact, and is an area where the faith community has been particularly active.
Most community impact investments are bond-like investments that provide interest payments to investors. Typically, community impact investments involve lending funds to community development financial institutions (CDFIs), or in some cases directly to individuals and groups. Some firms that are active in community investing also provide technical assistance to individuals who would otherwise not be able to access credit due to their lack of financial sophistication.
Some credit unions and community banks offer FDIC-insured CDs and money market accounts that are used to support local impact investing.