|
July 24, 2006
Trillium Takes the Reins from Winslow in Managing the Green Century Balanced Fund
by Bill Baue
The transition in portfolio managers has shifted the fund back to its roots as a core portfolio
holding by reducing risk and diversifying holdings across the multi-cap space.
SocialFunds.com --
Earlier this year, Green
Century Capital Management announced its decision to shift portfolio managers for the $50
million Green Century Balanced Fund (ticker: GCBLX) from Winslow Management Company to Trillium Asset Management. The move represents a
re-commitment to the roots of the fund, which was launched in 1992 by state public interest
research groups (PIRGs) to serve as a core portfolio holding for investors (and an income source
for the PIRGs, with all net profits supporting their advocacy work all along.)
 "After ten successful years of managing the Green
Century Balanced Fund together, Green Century Capital Management and its sub-advisor, Winslow
Management Company, mutually agreed that the two firms were moving in different directions,"
explained Erin Gray, marketing and strategic analyst for Green Century. "While Winslow was
transitioning to focus primarily on equities and particularly small capitalization growth stocks,
Green Century wanted to continue managing the Balanced Fund with both multi-cap stocks and bonds."
"We want this to be the kind of fund that investors view as a core offering that can be at
the center of their portfolio," added Adam Seitchik, Trillium's chief investment officer and lead
portfolio manager of the Green Century fund. "The Fund now has a diversified set of companies
across sectors and market capitalization, and the average credit quality of the bond holdings has
been increased."
The increased diversification has lowered the fund's risk profile. As of
April 30, the fund had higher price/earnings valuations and lower long-term debt/capital
measurement than the S&P 1500, the all-cap composite index that serves as the fund's mainstream
benchmark, according to Ms. Gray.
However, risk-reduction can result in a hit to
financial performance. While the fund flew high under Winslow's riskier strategy, it has come back
to earth under Trillium's more conservative management. Fund returns have fallen 0.98 percent
year-to-date as of June 30, and one-year returns stand at 2.48 percent. Those returns place the
fund in the 98th and 90th percentiles compared to their peer funds (both SRI and non-SRI),
according to data provided by Thomson Financial Network. Three-year
returns are 7.74 percent, placing the fund in the middle of the pack at the 55th percentile,
meaning it outperformed 45 percent of its peers.
The fund's shareowner advocacy got a
significant boost with the new sub-advising arrangement, as Winslow advances its environmental
commitment through positive and negative screening, while Trillium not only screens but also
actively engages companies on environmental issues. Green Century now augments its own strong
record on shareowner advocacy with that of Trillium in a close partnership.
"Green Century
continues to move forward with its most ambitious shareholder advocacy agenda ever involving
dialogue or resolutions with more than 30 high-profile companies in which we ask them to commit to
more environmentally sustainable practices," Ms. Gray told SocialFunds.com. Green Century filed
resolutions at ConocoPhillips (COP), where over 25 percent of
voting shareowners supported ecological protection in the National Petroleum Reserve Alaska, and
Amgen (AMGN),
where over 75 percent supported political contribution transparency and oversight. "Green Century
led several of these advocacy campaigns and worked in conjunction with Trillium among other
shareholders and non-profit groups to achieve strong positive results."
As well, the fund
continues to advance environmental sustainability through its positive and negative screening.
"We seek to invest in companies demonstrating environmental leadership in their operations and
product offerings, including alternative energy, green products, technologies, materials, and
infrastructure, organic and natural foods producers, distributors, and retailers, sustainable water
solutions, and sustainable development," Dr. Seitchik told SocialFunds.com. "In sectors such as
health care and financial services, where environmental impacts are often more indirect, we utilize
a best-of-sector approach with respect to environmental leadership, and we also use a set of
quantitative and qualitative screens to avoid companies that are doing harm to the environment."
"Given our focus on risk management, the biggest positions in the Fund tend to be larger
companies," he added, noting a significant change from the Winslow days.
Examples of
companies in the fund's top ten holdings that pass its positive environmental screens include
Johnson & Johnson (JNJ) and Johnson Controls (JCI), both of which
are taking leadership positions on advancing environmental solutions. In addition to conducting
environmental lifecycle reviews for all new products, packaging, and production processes, Johnson
& Johnson seeks to significantly reduce pollution with a goal of reducing carbon dioxide emissions
to seven percent below 1990 levels by 2010. Johnson & Johnson is also leads the corporate
community in commitment to green power, sourcing 18 percent of its energy from renewables such as
solar, wind, biodiesel, and landfill methane gas.
Johnson Controls is taking the lead on
green building, as it helped develop the US Green Building Council's Leadership in Energy and
Environmental Design (LEED) certification
standard. Its own Brengle Technology Center was one of the first buildings in the US to earn LEED
certification. The company was also a founding partner of the Environmental Protection Agency (EPA) Energy Star Building Program, which promotes and honors
energy efficiency.
"We are very pleased with many aspects of our relationship with
Trillium, including the depth of environmental and investment research, implementation of
investment strategy, extensive coverage of shareholder advocacy issues, and the strength and
experience of the portfolio management, compliance, and shareholder advocacy teams," concluded Ms.
Gray. "Green Century looks forward to deepening and developing its strong partnership with
Trillium."
©
SRI World Group, Inc. All Rights Reserved.
Top
|
