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September 15, 2000
Hi-Tech, Alternative Energy Stocks Buoy Social Fund Performance
Year-to-date performance of socially responsible mutual funds reflect positive screening for new
sustainable technologies.
SocialFunds.com --
High-tech companies have always been a staple of socially screened mutual funds, widely regarded as
socially responsible for their environmentally benign products and progressive employment
practices. This year has been the proving ground for funds that have invested heavily in these
companies, as demonstrated in their relative performance.
 The year-to-date performance of all social
funds, as of August 31, 2000, reveals the continued dominance of small and mid-cap funds over
large-cap funds this year, a general trend in the mutual fund industry contrasting last year's
large-cap growth bonanza. At the top of the pile, New Alternatives Fund handily outpaced all other
domestic equity social funds with a stellar 53.73 percent as of August 31.
"Our
performance has improved because the same types of companies we have chosen for the last 18 years
are losing their dependence on government and environmentalist support," said Maurice Schoenwald,
who co-manages the fund with his son David Schoenwald. "These new technologies are becoming cost
effective, especially fuel cells and solar cells."
New Alternatives' performance this year
represents one of the most dramatic turnarounds in social fund history, bringing it up to 15.31
percent annualized return for the three years ending August 31 and a sixth percentile ranking among
its peers for the same period. Schoenwald calls the fund's management style "eclectic," but it is
devoted to companies that do something positive for the environment, especially alternative and
renewable energy sources.
"We invite our shareholders, every quarter, to comment on the
socially conscious performance of the companies we have chosen, to advise us of new relevant
technologies, and to provide special scientific knowledge they may have," said Schoenwald. "It is
now time for us to look forward to new technologies, such as ocean energy, where there is not yet a
single company in which we can comfortably invest."
Citizens Emerging Growth Fund is
the second place performer among domestic equity social funds this year, with a distant 28.11
percent return year-to-date as of August 31, or 46.28 percent annualized return for three years.
Part of the top-performing Citizens family of funds, employing the same rigorous social screens as
in the Citizens Index, this fund is managed by Senecca Capital Management in San Francisco.
"Concentrating on fundamentals allowed us to avoid stock meltdowns that were all-too-frequent
in recent months," said Kathleen Feeks, Marketing Manager at Citizens. Top contributors in the
Citizens Emerging Growth portfolio for the year were in the technology arena, especially
PMC-Sierra, a telecommunications network company, up 595 percent, and Mercury Interactive, a
software developer, up 447 percent.
Parnassus Fund is the third place performer among top
rated domestic equity social funds, with 25.64 percent return year-to-date as of August 31, giving
it a 19.48 percent annualized return over three years and a first percentile ranking among its
peers for the same period.
"Our top performance this year is mainly due to holding a high
technology position at the beginning of the year, over 50 percent, and then reducing it to under 40
percent by early March when technology stocks crashed," said Parnassus President and Portfolio
Manager Jerome Dodson. "Also, the technology shares we owned were solid, like Intel, and we did not
own any of the wilder technology companies, like the dot.coms."
The top performer this
year among international and global funds is hands-down Portfolio 21, the environmental
sustainability fund introduced last year by the Portland, Oregon-based Progressive Investment
Management. Portfolio 21 gained 10.21 percent return year-to-date, leading Citizens Global Equity
Fund, at 1.36 percent, by a healthy margin.
"High oil prices have been a plus for
alternative energy companies," said Leslie Christian, President of Progressive Investment.
"Portfolio 21 holds Ballard Power and AstroPower, both of which have performed extremely well this
year. We have also benefited from a high level of diversification during the market volatility we
have experienced this year."
The top-performing social fixed income fund so far this year
is Parnassus California Tax-Exempt Fund, one of the three bond funds that are part of the Parnassus
Income Trust. With 8.43 percent return as of August 31, this fund has a three-year annualized
return of 5.50 percent and first percentile ranking among its peer group for the same period.
Unfortunately, you have to be a California resident to invest in it.
Among socially
responsible balanced funds, Green Century Balanced Fund tops the charts with 39.08 percent return
as of August 31, contributing to its eye-popping 1-year return of 115.62 percent. Managed by Jack
Robinson of the Boston-based Winslow Management Company, this highly proactive environmentally
screened fund has a three-year annualized return of 32.08 percent, and receives a first percentile
ranking among its peers for the same period.
"The emerging alternative and renewable
energy industry is gaining momentum, genuine profitability, and respect," said Robinson. "This is
an important group for us as we own Astropower, Vestas Wind, Fuel Cell, Valence, and others. I
believe that this group is at the beginning of a very favorable, long term, high growth secular
trend."
Investing in alternative energy and other technology industries that are
environmentally advantageous is a powerful example of "positive" screening at its best. Although
eight months does not a year make, these industries can obviously have a very positive influence on
social fund performance.
©
SRI World Group, Inc. All Rights Reserved.
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