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January 07, 2000
New Citizens Fund Says Small Is Beautiful
One of the premier socially responsible mutual fund families welcomes a new Small Cap Index Fund
into the world.
Citizens Index Fund, a large cap index fund with over $775 million in assets, has been one of the
best-performing socially and environmentally responsible mutual funds in recent years, outpacing
the Standard & Poors 500 since its inception in 1995. Now Citizens Funds, a responsible fund family
based in Portsmouth, New Hampshire, with over $1.4 billion in assets, is building on this success
to launch a Small Cap Index Fund.
Citizens Funds announced today that it's new
Citizens Small Cap Index Fund commenced operations on December 28, 1999, on the eve of the new
Millennium. This announcement raises the number of socially responsible funds launched in 1999 to
seven, a sizable blip in the steady growth of the industry.
"We are pleased to be offering
our second index fund," said John L. Shields, President and CEO of Citizens Advisers, the
investment advisor to all the Citizens Funds, "and we are very excited about establishing a
presence in the small cap mutual fund market."
The Citizens Small Cap Index Fund will
follow a passively-managed "buy and hold" strategy of investing in the companies that comprise the
Citizens Small Cap Index, and will attempt to perform comparably to that index. The Citizens Small
Cap Index is a proprietary, market-weighted index of approximately 300 small capitalization
companies created and maintained by Citizens Advisers, Inc.
"The fund's strategy," said
Sophia Collier, Chair of Citizens Advisers, Inc. and creator of the Citizens Small Cap Index, "can
be summarized as 'buy and hold quality small cap names.'" Ms. Collier stated that the fund "was
designed as an investment strategy to harvest the returns available within the small cap sector of
the domestic stock market and to give investors an opportunity to participate in both the high
growth potential and significant value found in companies of this size."
300 companies that make up the index are selected through Citizens' thorough screening process,
offering positive environmental, community, and workplace records, and represent the best examples
in each of their respective industries. During normal market conditions, at least 65 percent of the
companies in the index will have market capitalizations in the same range as the S&P SmallCap 600
Index, about $33 million to $3 billion.
Although small cap funds tend to be more risky,
reflecting the volatile nature of smaller and start-up companies, Citizens Funds hopes their
strategy will offer more stability. "A key aspect of the Citizens Small Cap Index Fund's design,"
said Collier, "is a high degree of diversity that is intended to offer a greater margin of safety
than may be present in a small cap fund that has fewer names or more industry concentration."
With the introduction of the Small Cap Index Fund, Citizens Funds now offers a family of six
mutual funds, including four equity funds, an intermediate term bond fund, and a money market fund.
This new fund will not only broaden Citizens family of funds, but it will also give social
investors more choice in the small cap arena.
"Citizens Funds now offers both equity and
fixed income funds, both active and passive management, as well as presence in the large-, mid- and
small-cap sectors of the equity mutual fund markets," said Shields. "We will continue to broaden
our offerings and expand into additional distribution channels because we believe there is growing
demand for the unique investment style and process that Citizens offers."
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