April 10, 2014
Recently, Calvert launched its latest sustainable and responsible investment (SRI) mutual fund. The market for green and environmental social and governance (ESG) investments in the retail and institutional arena has been growing. Very little product to date has been developed for investors to tap into green bonds or the broader category of ESG fixed-income. The Calvert Green Bond Fund (CGAFX) is co-managed by fixed income portfolio managers Cathy Roy, Vishal Khanduja, and Mauricio Agudelo of Calvert Investment Management, Inc. (CIM), part of Calvert’s seasoned fixed-income money management team. Calvert has a track record of managing sustainable bond strategies since 1987. The Fund is an actively managed, diversified, intermediate fixed-income fund that will seek to maximize income, to the extent consistent with preservation of capital, primarily through investment in bonds, with a focus on opportunities related to providing solutions to climate change and other environmental sustainability issues.
“As a leader in sustainable investing, Calvert is at the forefront of the green bond industry,” said Calvert’s Chief Investment Officer Cathy Roy. “Corporate holdings in this fund will meet our definition of green if they derive at least half of their revenues from clean tech or an environmentally beneficial technology, product or service. We’ll also invest in project bonds that achieve goals such as developing smart growth and transit, energy efficiency, pollution prevention, and green real estate to name a few.” The Calvert Green Bond Fund seeks to provide strong relative long-term risk adjusted returns through investment in fixed-income securities. Rigorous fundamental security analysis, value driven portfolio management, proprietary ESG analysis, and green bond expertise are integrated features of the process used to achieve the objective. Learn more about the Fund and investment strategy [Article Note 1]
“Our allocation to non-index sectors, markets and issuers increases diversification and enhances the potential for higher returns,” said Calvert’s Co-Portfolio Manager Vishal Khanduja. “Our top down fundamental analysis combined with rigorous bottom-up security selection helps us identify sectors and issuers with the best risk adjusted return potential.”
“Investors are looking for alternatives to align their social values with green investments,” said Calvert’s Co-Portfolio Manager Mauricio Agudelo. “Our ESG integration across Calvert’s experienced sustainability and fixed income research teams will help us identify investments that offer attractive risk/reward profiles. The Fund is designed to capture the investment opportunity from the trillions needed in new capital to address key global sustainability challenges.”
“This strategy is aimed at solving some of today’s most pressing environment and sustainability challenges, like climate change and water, which are very important to us,” said Bennett Freeman, Calvert’s SVP for Sustainability Research and Policy. “Investors are seeking an integration of ESG initiatives in their portfolios. Leveraging Calvert’s outstanding sustainability analyst team more fully across both equities and fixed income is just a natural evolution of our overall focus on ESG integration.”
Calvert’s believes that ESG integration adds value to the investment analysis process and helps protect investors from hidden risks. Learn more about the value of ESG Investing by reading Calvert’s eBook: Creating Shareholder Value With ESG Integration [Article Note 2].
Investment in the Fund involves risk, including possible loss of principal invested. Investing primarily in green investments carries the risk that, under certain market conditions, the Fund may underperform funds that invest in a broader array of investments. In addition, some green investments may be dependent on government tax incentives and subsidies, and on political support for certain environmental technologies and companies. The green sector may also have challenges such as a limited number of issuers and liquidity in the market, including a robust secondary market.
The Fund is subject to interest rate risk and credit risk. When interest rates rise, the value of fixed-income securities will generally fall. In addition, the credit quality of the securities may deteriorate, which could lead to default or bankruptcy of the issuer where the issuer becomes unable to pay its obligations when due.
For more information on any Calvert fund, please contact Calvert at 800.368.2748 for a free summary prospectus and/or prospectus [ www.calvert.com/literature-prospectuses.html] . An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The summary prospectus and prospectus contain this and other information. Read them carefully before you invest or send money.
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