tag:blogger.com,1999:blog-10816451887959158332023-12-12T12:55:29.453-05:00Smugly GreenThe documentation of a green hedge fund startup and green money manager.Unknownnoreply@blogger.comBlogger28125tag:blogger.com,1999:blog-1081645188795915833.post-88706794413808891612009-02-17T17:01:00.001-05:002009-02-17T17:01:04.529-05:00Green Is Dead: Long Live the GreenAfter a long hiatus, Smug is back. Not so much back (Smug never left), but making a more conscientious effort to reprioritize posting. And no time like the present as the market quietly falls into oblivion.<br /><br />Some very quick personal updates:<br /><ul><li>Smug Investments launched at just the wrong time, stalled, and de-launched temporarily. Funding is dry for hedge fund start ups, green or not, even with no leverage. Despite that, the model is still running and trading - we lost roughly 16% in 2008, which ain't so bad considering it's a.) all publicly traded, and b.) the S&P lost 40%. More on the Smug model to come in future posts.</li><li>I've started working at a non-profit, Ceres, in their Investment division. I manage their Clean Tech Investment Programs, facilitating some of the largest institutions in the world to invest in clean tech and sustainable vehicles. Smug is not dead - Smug is Smugger. For more information on my non-profit work, see www.incr.com (the Investor Network on Climate Risk) or www.ceres.org.</li></ul>On to bigger and better things.<br /><br />So many of you (if there are any of you left) are in the unenviable position of losing money in the current market. Green is definitely not an exception - the NEX index lost nearly 60% last year, a measure of global green investments developed by Robert Wilder (WilderHill leased the index to make the <a href="http://www.google.com/finance?client=ob&q=NYSE:PBD">PowerShares Global Clean Energy ETF - ticker PBD</a>). No happy campers in that boat. The headlines are getting worse and worse, as well - things like "Green Is Stalling", "Green Is Dead", "Why Everything Sucks", and "Could Things Be Worse for Climate Change?". Oddly, the ominous seems to downplay the positive things coming out of the new Obama administration - longer subsidies for clean energies, infrastructure focused on green jobs, and allowing states to put mandates on car emissions.<br /><br />So let's put this all in a bit of perspective: yes, it's bad. But it's not all bad. Especially if you move your world view beyond the walls of the US markets.<br /><br />Green investments now are almost universally at or near their 52 week low. Hell, they are at or near their 3 year and 5 year lows. Some of them? All time lows. And finally, we have governmental support in the US for green. So ultimately, ask yourself this: <span style="font-weight: bold;">where else would you put your money</span>?<br /><br />This is a question I've spend the last 4 months posing to some of the largest institutions in the world - CalPERS, CalSTRS, NYCERS, and others. Some of them are selling investments to make payroll. Others are making cuts. Many of them are literally pulling out and investing everything in Treasuries that are yielding between 0 and 1 percent - the equivalent of putting money in the mattress. But when posed the question, they have no answer. <span style="font-weight: bold;">Except green.</span><br /><br />Why?<br /><br />Here are the driving forces:<br />1.) <span style="font-weight: bold;">Policy </span>- everyone is holding their breath for Obama to make his first real move. It's coming, and it's coming soon. Policy favors green for the next 4 years, and where the government incentivizes, the money is soon to follow.<br /><br />2.) <span style="font-weight: bold;">Growth potential </span>- in public equity markets, green is at an all time low. Does anyone think, that even if it were to sink another 10 or 15%, that it won't come back? Does anyone honestly think that ALL of these companies will be bankrupt? That there is no future in wind, solar, or other renewables?<br /><br />3.) <span style="font-weight: bold;">Cash</span> - the biggest players have either been sitting on the sidelines with cash for a while, or have pulled out of the market in the last few months anyway. Some of this cash will go to avoiding the need for more ridiculous bailout money. But much of it, as in the case of some of the big institutions (and institutional like investors a la Warren Buffet), there will come a point in the not so distant future where everything looks cheap and the bottom feels near. When the money starts pouring in, where do you think it will go?<br /><br />I'll leave you with this parting portfolio snapshot of Smug Green Global for you to ponder, it's our last trade allocation:<br /><br /> <table str="" style="border-collapse: collapse; width: 382pt;" border="0" cellpadding="0" cellspacing="0" width="509"><col style="width: 48pt;" width="64"> <col style="width: 284pt;" width="379"> <col style="width: 50pt;" width="66"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt; width: 48pt;" height="17" width="64">CRATX</td> <td class="xl25" style="width: 284pt;" width="379">CRA Qualified Investment Retail<br /></td> <td class="xl26" style="border: 0.5pt solid windowtext; background: yellow none repeat scroll 0% 0%; width: 50pt; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="0.13523174039241914" width="66">13.52%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">CXA</td> <td class="xl25">California Municipal Bond ETF</td> <td class="xl26" style="border: 0.5pt solid windowtext; background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="0.11955314357270606">11.96%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" str="DBA " height="17">DBA<span style=""> </span></td> <td class="xl25">DB Agricuture ETF</td> <td class="xl26" style="border: 0.5pt solid windowtext; background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="0.11397515355822749">11.40%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">FXS</td> <td class="xl25">CurrencyShares Swedish Krona Trust ETF</td> <td class="xl26" style="border: 0.5pt solid windowtext; background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="0.10867398863457765">10.87%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">INY</td> <td class="xl25">SPDR New York Municipal Bond ETF</td> <td class="xl26" style="border: 0.5pt solid windowtext; background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="0.12739794416097083">12.74%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">JJG</td> <td class="xl25">iPath DJ AIG Grains ETF</td> <td class="xl26" style="border: 0.5pt solid windowtext; background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="0.11189745145241141">11.19%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">PAXHX</td> <td class="xl25">Pax World High Yield A</td> <td class="xl26" style="border: 0.5pt solid windowtext; background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="0.15953142819093488">15.95%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">UDN</td> <td class="xl25">PowerShares DB USD Index Bearish ETF</td> <td class="xl26" style="border: 0.5pt solid windowtext; background: yellow none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="0.1237391500377526">12.37%</td> </tr> </tbody></table><br />Bonds and agriculture. Things have changed, but this portfolio saved me over 20% during October's drop (Smug was down -7.58%). If you've followed our metrics in the past posts, you'll know why these things are "green". If not, do some catching up.<br /><br />And hopefully I have time to keep this up!Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1081645188795915833.post-61719519846671522212008-08-14T08:22:00.005-04:002008-08-15T17:53:01.148-04:00Smug Profile: Non Profit + Green Investing = Bliss<p>It has been a few weeks since posting, but it's been a busy period. My models have been down, but there's no cause for alarm, all's well in Smug land. In fact, I'm busy looking for open positions in green investment funds, which brings me in part to my self serving post of the day - a write up of Green Century Balanced Fund, a Green Century Capital Management mutual fund:<br /><br />Ticker: <a href="http://finance.google.com/finance?q=NASDAQ%3AGCBLX">GCBLX</a><br />Inception: March 18, 1992<br />Asset Type: Mutual Fund - Mixed<br />Markets: Domestic<br />Smug Category: <span style="font-weight: bold;">Bond</span><br />Included in Smug Asset Pool?: Yes<br />Returns:</p><table valign="top" cellpadding="3" width="100%"><tbody><tr><td nowrap="nowrap" width="50%">YTD </td> <td align="right" width="30%"> -5.85% </td> <td><br /></td> </tr> <tr> <td nowrap="nowrap" width="50%"> 1 year </td> <td align="right" width="30%"> -3.73% </td> <td><br /></td> </tr> <tr> <td nowrap="nowrap" width="50%"> 3 year annualized </td> <td align="right" width="30%"> 1.90% </td> <td><br /></td> </tr> <tr> <td nowrap="nowrap" width="50%"> 5 year annualized </td> <td align="right" width="30%"> 5.36% </td> <td><br /></td></tr></tbody></table><br />Min Investment: $2,500<br />Min Retirement Investment: $1,000<br />Minimum Additional: $50 automatic investment, $100 otherwise<br />Sales Load:<br />$2,500 to $24,999.99: 0.00% of offering price<br />$25,000 to $99,999.99: 0.00% of offering price<br />$100,000 or more: 0.00% of offering price<br /><br />Management Fees: 0.65% for 2007 - based on AUM.<br />12b-1 Fees: None<br />Other fees: 0.73%<br />Total Annual Fee: 1.38% for 2007.<br /><br />I'll be honest - this fund has not been my first choice historically, in large part because the fees are much higher than others at 1.38%. That said, there is good reason to be excited about this fund. <span style="font-weight: bold;">100% of net profits generated fund non profit research</span>. Yes, <span style="font-weight: bold;">100%</span>. It's almost comically non capitalist. That, to me, says in a nutshell what Green Century tries to accomplish. Not only do they have fairly selective screens on their investment choices, but the revenue goes into a pool and subdivided by the consortium of non profits that "own" Green Capital Management.<br /><br />Then there's the investment choices themselves. Similar to Pax World's High Yield Fund, which was just dinged by the SEC for not following their own screens several years ago (tsk), Green Century Balanced is a combination of corporate debt, other bonds, and a modicum of growth investing thrown in to keep the returns nice and round. It should act as a nice, semi stable piece of moderate income with moderate growth, despite it's tough year this year (who hasn't had a tough year, really?).<br /><br />As an eternal skeptic, my first question was, "what do these non profits do?" Again, I was surprised by the answer. GCBLX funds some of the biggest and brightest think tanks in the country, including the state "PIRG" groups (Public Interest Research Group). As if being a responsible investor by investing in Green Century is not enough, you'd also be inadvertently (or maybe "advertently?") supporting research in responsible business practice to boot! The nice long 10+ year track record of beating their benchmark doesn't hurt, either.<br /><br />All in all, the fund is definitely worth looking at. And cross your fingers I get the job with them.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-26246735731081938552008-07-29T14:43:00.001-04:002008-07-29T14:43:01.096-04:00Where Local Makes Love to Sustainable: SRI BankingLocal and regional banks are getting a bad rap thanks in large part to the bevy of socially parasitic mortgage brokers that dealt out most of the subprime loans that are the weight around the neck of our national financial infrastructure right now. Of course, the subprime issues are more a symptom of corporate excess than the underlying cause, but that's neither here nor there. For now, suffice it to say that<span style="font-weight: bold;"> local banks are not all bad</span>. In fact, <span style="font-weight: bold;">many of them promote sustainable, socially responsible solutions to their regions</span>.<br /><br />So what are these banks, and how do you join the fray?<br /><br />While the number of purely sustainable solutions are small, the concept is alive in a couple of banks worth looking at, even if from afar. And if you're not already in <a href="http://finance.google.com/finance?client=ob&q=CRATX">CRATX</a>, the Community Reinvestment Act Fund (as detailed <a href="http://smuginvestments.blogspot.com/2008/06/local-vs-green-cage-match.html">here</a>), you should definitely consider it. But here are some truly excellent solutions to make more than just your stocks sustainable or responsible, but to extend the same thinking to your savings and cash.<br /><br /><span style="font-weight: bold;">Wainwright Bank & Trust</span><br /><br />I just recently mentioned Wainwright's stock, <a href="http://finance.google.com/finance?client=ob&q=NASDAQ:WAIN">WAIN</a>, as a part of my last Seeking Alpha article, but their Green business loans and Equal Exchange CDs are worth getting excited about. For a minimum of $1,000 and a 3 year commitement, you can open an <span style="font-weight: bold;">Equal Exchange CD in which the funds are loaned to Equal Exchange which invests in Fair Trade coffee farms</span> and farming practices. Not only is this exciting from a sustainability standpoint, but the APY is a none too shabby 3.00%, costing only 70bps from average CD rates.<br /><br />There is always a catch, of course - there are penalties for early withdrawal (situationally depending). If you already have an account at Wainwright, you can have CD interest depostited directly into your money market, checking or savings accounts, a nice little perk. The CD is FDIC insured and sustainable, what more could you want?<br /><br />Well, if you're a homeowner interested in greening your house, Wainwright offers a Green Loan specifically designed to target green home improvements. Green loans offer rate reductions and no closing costs, all perks to make the investment in reducing your long term energy costs. If you're a non profit, Wainwright is one of the few institutions country wide with a division devoted entirely to communtiy and non profit development. With over $500M in community investment loans, Wainwright cements itself as one of the leaders in socially responsible and sustainable banking.<br /><br />Not to mention the stock is currently paying a 3+% dividend yield. See more information at <a href="http://www.wainwrightbank.com/">www.wainwrightbank.com</a>.<br /><br /><span style="font-weight: bold;">ShoreBank</span><br /><br />ShoreBank is the original socially responsible bank. With a 35 year history, a diverse management team, and a long standing commitment to community investing, ShoreBank is now the gold standard of SR banking, despite it's growing corporate entities. For the retail consumer, ShoreBank has a bevy of Developmental Deposit accounts (checking, savings, money market, time deposit, and IRA) that target community development projects with the funds. They offer market rate APYs, meaning you're not paying in yield to be responsible. So, all things being equal, there's no good reason <span style="font-weight: bold;">not</span> to be responsible.<br /><br />Beyond just the typical deposit account, ShoreBank has excellent online high yield savings accounts that offer higher yielding rates and the same social developmental projects. Best of all, the high yield savings accounts have $1.00 minimums, online access, and no monthly fees.<br /><br />The newest product on ShoreBank's ever increasing roster is the EcoDeposit through their ShoreBank Pacific branch. EcoDeposits are designed to invest in companies that reduce energy inefficiencies and waste in an effort to preserve the Pacific northwest forests. In many ways, ShoreBank has designed these programs to act almost as <span style="font-weight: bold;">charitable contributions that pay you for your efforts</span>.<br /><br />For more details, check out <a href="http://www.sbk.com/">www.sbk.com</a>.<br /><br />So be smug and save sustainably while you invest sustainably.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-1081645188795915833.post-87623484480068173572008-07-27T20:32:00.000-04:002008-07-27T20:52:11.751-04:00Smug Profile: Waste Not, Want Not<p>Smug's next stop on the profile bandwagon is an industry that definitely does not get its due accord - waste and recycling. Waste management, like water treatment, is an inevitable need of <span style="font-weight: bold;">every</span> civilization. In that way, when taken as a whole, waste should tend to act more like a commodity than equity. I'm still watching for the moment you can readily buy and sell futures contracts on recycled metals (especially in ETF fashion), but for now, we can at least take solace in Market Vectors' Environmental Services ETF:<br /><br />Ticker: <a href="http://finance.google.com/finance?client=ig&q=EVX">EVX</a><br />Inception: October 10, 2006<br />Asset Type: ETF<br />Markets: Global<br />Smug Category: <span style="font-weight: bold;">Waste</span><br />Included in Smug Asset Pool?: Yes<br /><br />Returns: YTD 2.30%<br /><br />Expense Ratio: 0.55%<br />Total Market Cap: 42M<br />Annual Turnover: 3%<br />Current Yield: 1.03%<br /></p><p>With a moderate expense ratio, EVX offers exposure to what Smug believes is one of the unaccounted for basic needs investments. Along with food, water, clothes, and a roof over our heads, it is inevitable that we will produce waste. The long term prospects are astounding as populations soar and growth in China and elsewhere abroad booms, the need for increasingly efficient and intelligent waste management is tantamount. Along with water, we consider waste a commodity and expect to move with lower correlations to the overall market as the track record increases.</p><p>All in all, consider it as exposure to a relatively obscure but well positioned sector. And be smug, invest sustainably.<br /></p><p></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-3929420780021661952008-07-26T15:08:00.001-04:002008-07-26T15:08:00.896-04:00Al Gore's Green Challenge: Ignore It and Start SmallAl Gore recently gave <a href="http://www.wecansolveit.org/content/pages/304/">this speech challenging our country</a> to use 100% renewable sources within the next 10 years.<br /><br />Hooray?<br /><br />While you would think that would make us green investors jump for joy, instead all I hear is a reverberating echo. As much as I love the challenge, and I love Mr. Gore's science, mission, and rhetoric even more, the problem is ideological. How do you take historically consumptive and self interested Americans, from Wall Street to Main Street, and get them to believe that green energy is necessary (or even <span style="font-weight: bold;">possible</span>)? Especially in a country that ridiculously fights the notion that global warming is even occurring!<br /><br />Permit me one self righteous, proselytizing rant: not until green can line the pockets of the already wealthy while keeping the status quo will it ever be viable. That means paying government with special interest money to rival oil, gas, coal, and other pollutant energies. It also means venture capitalist cash flows, double and tripling profits of Wall Street financiers, and forcing (and I do mean forcing) the average joe to comply with green energy initiatives. If it's going to happen in 10 years, green will have some serious moving and shaking to do <span style="font-weight: bold;">right now</span>.<br /><br /><br /><span style="font-weight: bold;">Green Energy Becomes Tradeable Commodity</span><br /><br /><a href="http://seekingalpha.com/article/86203-gore-s-renewable-energy-challenge-and-how-it-would-shift-investing">Julian Murdoch of Hardassetsinvestor.com wrote a piece</a> on the movement we could expect from a move to green. He points out one thing in particular that both caught my eye and gave me concern: "...wind, solar and geothermal power aren't tradable commodities..." This is both troubling and promising at the same time, and here's why.<br /><br />When the CME figured out how to make weather derivatives a viable investment vehicle, who's to say we couldn't trade excess energy from solar flares (a fairly random occurance)? Or the excess energy from geothermal activity, or storm activity that generates stronger waves? The fact is, they will figure it out. It will be sketchy at first, incredibly difficult to understand, and basically akin to betting on football games, but they will figure out a way. The CME (and all of Wall Street for that matter) is easiest to describe as a giant Vegas, setting prices designed to have a market on either side. The brokers are the bookies, and you are the gambling addict. When viewed in that light, it's easy to understand how there's a market for just about anything you can bet on.<br /><br />What troubles me about green energy as a commodity is it's inherently linked to natural occurences. A mine, once found, yields a certain amount of ore which can be manufactured and refined. This means there is a limited quantity for that commodity - when the mine runs out, the ore price rises. If green energy commodities, like wind and solar, come into being, you are dealing with sustainable, hypothetically infinite "mines". The market implications are totally unquantifiable at this point, and my gut instinct is to assume no Wall Street market maker is interested in a game that isn't rigged. To that extent, there may be pressure to force us, the consumer, to pay for the commodity in ways we don't pay for it now.<br /><br />Call it my deeply ingrained cyncism, but I think there's danger in motivating green commodities too abruptly. I think Mr. Gore's challenge was primarily aimed at Congress, but I think what it lacks is the acknowledgement that <span style="font-weight: bold;">Congress is elected by you and paid for by big business</span>. I think the big change will come from you, the little guy.<br /><br /><br /><span style="font-weight: bold;">Start Small, Not Big: Don't Wait For Big Brother</span><br /><br />While Mr. Gore's challenge is inspirational, <span style="font-weight: bold;">the serious change has to happen with you first</span>. Wall Street will sit up and take notice when investors invest in green. If Wall Street sees money in it, expect profiteers to enter the market, prices to skyrocket, profits will be made, corruption will be abundant, and eventually the market will crash! But hopefully not before it's actually done some good.<br /><br />Starting small can happen in many ways, all of which are in your control:<br /><br /><span style="font-weight: bold;">1.) Call your broker, call your 401(k) provider, call your retirement administrator and ask for green or socially responsible.</span> Pressuring at the institutional level can easily help sway the tide from the inside.<br /><br /><span style="font-weight: bold;">2.) Self directed brokerage account? Set a percentage to be green and responsible, and rebalance once a year. </span>Even if that percentage is just 5%, it makes a difference in the long run. Plus, it can't hurt to diversify.<br /><br /><span style="font-weight: bold;">3.) Do the little things around the house: recycle, don't use plastic bags, find a farmer's market, and maybe even if it's yellow let it mellow.</span> Outside of urbana (and to large extent, suburbana), recycling still isn't the norm. You don't have to buy a hybrid or solar panels right away to make a difference. In fact, there is evidence to suggest that the environmental cost of <span style="font-weight: bold;">making</span> a new hybrid is far greater than just buying a used car (used hybrids top all, though). At the risk of standing on a pedastal, imagine if everything you threw away you were forced to throw in your backyard (or in a corner in your apartment). Suddenly those 20 beer bottles and used milk containers would be much better off in the recycle bin!<br /><br />Need some guidance to step one? Start <a href="http://seekingalpha.com/article/83074-a-beginners-guide-to-green-investing">here</a>, then move on to <a href="http://smuginvestments.blogspot.com/2008/07/etfs-for-complete-green-portfolio.html">this</a>.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-66498666752475941532008-07-24T11:11:00.010-04:002008-07-24T14:25:12.533-04:00New Investment Management ParadigmI have been approached by the gurus at <a href="http://www.rainboxportfolios.com/model.aspx?ID=74">Rainbox Portfolios</a> to be one of their premier portfolio managers. It is definitely a tempting idea, and could be a new way to invest, but I'm just not clear how viable it really is, especially for smaller investors. Here's how it works:<br /><br />I would operate and maintain what amounts to a live portfolio and research platform. For a monthly subscription fee, the client would have access to Smug research reports and <span style="font-weight: bold;">live updates on portfolio changes</span>. This might appeal to the DIYer who isn't <span style="font-weight: bold;">entirely</span> sure how to DIY. Every time Smug gets a trade signal from the green trading model, <span style="font-weight: bold;">you get the trade signal too</span>, in the form of an email indicating a price to buy (with a cushion), number of shares, and cost information. The only thing left for you, the client, to do is to place the trade as indicated.<br /><br />This appeals to me on a few levels. Firstly, there is no bias for portfolio size. If you have a $10,000 portfolio or a $1,000,000 portfolio, your fee structure is exactly the same: the monthly subscription fee plus the cost to trade, which you can control. For instance, I prefer using optionsXpress for some of my accounts. The trading cost is $14.95 per trade regardless of size of the trade (though bigger accounts can get lower per trade costs) and there are no annual fees. I haven't found any hidden fees yet, either, in my time using them, so all in all, I'm satisfied.<br /><br />Assuming your self directed accounts are in the $15/trade ballpark, which most of them are, here is a look at what portfolio size corresponds to what annual fee. As you would be making the trades yourself, I built in a cushion for "hassle" and "time to trade" as follows (all values are annual):<br /><br /><span style="font-weight: bold;">Assumptions:</span><br /><table str="" style="border-collapse: collapse; width: 130pt;" border="0" cellpadding="0" cellspacing="0" width="173"><col style="width: 74pt;" width="98"> <col style="width: 56pt;" width="75"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl65" style="height: 12.75pt; width: 74pt;" height="17" width="98">Hassle Cost:</td> <td class="xl69" style="width: 56pt;" num="4.4999999999999997E-3" width="75">0.45%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl65" style="height: 12.75pt;" height="17">Time Cost:</td> <td class="xl67" num="28">$28.00</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl65" style="height: 12.75pt;" height="17">Trading Cost:</td> <td class="xl67" num="14.95">$14.95</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl65" style="height: 12.75pt;" height="17">Annual Fee:</td> <td class="xl67" num="0">$0.00</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl65" style="height: 12.75pt;" height="17">Turnover %:</td> <td class="xl68" num="0.5">50%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl65" style="height: 12.75pt;" height="17">Assets:</td> <td class="xl66" num="">12</td> </tr> <tr style="height: 13.5pt;" height="18"> <td class="xl65" style="height: 13.5pt;" height="18">Growth Rate:</td> <td class="xl69" num="0.05">5.00%</td> </tr> </tbody></table><br /><span style="font-weight: bold;">Annual Fee Breakdown:</span><br /><table str="" style="border-collapse: collapse; width: 522pt;" border="0" cellpadding="0" cellspacing="0" width="698"><col style="width: 74pt;" width="98"> <col style="width: 56pt;" span="8" width="75"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl69" style="height: 12.75pt; width: 74pt;" height="17" width="98">Subscription</td> <td class="xl71" style="border-left: medium none; width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl65" style="height: 12.75pt;" height="17">Fee</td> <td class="xl66" style="border-left: medium none;" num="2500">$2,500</td> <td class="xl67" num="5000">$5,000</td> <td class="xl67" num="7500">$7,500</td> <td class="xl67" num="10000">$10,000</td> <td class="xl67" num="20000">$20,000</td> <td class="xl67" num="30000">$30,000</td> <td class="xl67" num="50000">$50,000</td> <td class="xl67" num="100000">$100,000</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="7.5" height="17">$7.50 </td> <td class="xl68" style="border-left: medium none;" num="0.11378287900526063">11.38%</td> <td class="xl68" style="border-left: medium none;" num="5.6891439502630314E-2">5.69%</td> <td class="xl68" style="border-left: medium none;" num="3.7927626335086874E-2">3.79%</td> <td class="xl68" style="border-left: medium none;" num="2.8445719751315157E-2">2.84%</td> <td class="xl68" style="border-left: medium none;" num="1.4222859875657579E-2">1.42%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="9.4819065837717185E-3">0.95%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="5.6891439502630313E-3">0.57%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="2.8445719751315156E-3">0.28%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="10" height="17">$10.00 </td> <td class="xl68" style="border-left: medium none;" num="0.12526064084170252">12.53%</td> <td class="xl68" style="border-left: medium none;" num="6.263032042085126E-2">6.26%</td> <td class="xl68" style="border-left: medium none;" num="4.1753546947234176E-2">4.18%</td> <td class="xl68" style="border-left: medium none;" num="3.131516021042563E-2">3.13%</td> <td class="xl68" style="border-left: medium none;" num="1.5657580105212815E-2">1.57%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="1.0438386736808544E-2">1.04%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="6.2630320420851262E-3">0.63%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="3.1315160210425631E-3">0.31%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="12.5" height="17">$12.50 </td> <td class="xl68" style="border-left: medium none;" num="0.13673840267814441">13.67%</td> <td class="xl68" style="border-left: medium none;" num="6.8369201339072205E-2">6.84%</td> <td class="xl68" style="border-left: medium none;" num="4.557946755938147E-2">4.56%</td> <td class="xl68" style="border-left: medium none;" num="3.4184600669536103E-2">3.42%</td> <td class="xl68" style="border-left: medium none;" num="1.7092300334768051E-2">1.71%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="1.1394866889845368E-2">1.14%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="6.8369201339072211E-3">0.68%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="3.4184600669536105E-3">0.34%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="15" height="17">$15.00 </td> <td class="xl68" style="border-left: medium none;" num="0.1482161645145863">14.82%</td> <td class="xl68" style="border-left: medium none;" num="7.4108082257293151E-2">7.41%</td> <td class="xl68" style="border-left: medium none;" num="4.9405388171528772E-2">4.94%</td> <td class="xl68" style="border-left: medium none;" num="3.7054041128646575E-2">3.71%</td> <td class="xl68" style="border-left: medium none;" num="1.8527020564323288E-2">1.85%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="1.2351347042882193E-2">1.24%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="7.4108082257293159E-3">0.74%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="3.705404112864658E-3">0.37%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="17.5" height="17">$17.50 </td> <td class="xl68" style="border-left: medium none;" num="0.15969392635102822">15.97%</td> <td class="xl68" style="border-left: medium none;" num="7.984696317551411E-2">7.98%</td> <td class="xl68" style="border-left: medium none;" num="5.3231308783676066E-2">5.32%</td> <td class="xl68" style="border-left: medium none;" num="3.9923481587757055E-2">3.99%</td> <td class="xl68" style="border-left: medium none;" num="1.9961740793878528E-2">2.00%</td> <td class="xl68" style="border-left: medium none;" num="1.3307827195919017E-2">1.33%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="7.98469631755141E-3">0.80%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="3.992348158775705E-3">0.40%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="20" height="17">$20.00 </td> <td class="xl68" style="border-left: medium none;" num="0.17117168818747011">17.12%</td> <td class="xl68" style="border-left: medium none;" num="8.5585844093735056E-2">8.56%</td> <td class="xl68" style="border-left: medium none;" num="5.7057229395823368E-2">5.71%</td> <td class="xl68" style="border-left: medium none;" num="4.2792922046867528E-2">4.28%</td> <td class="xl68" style="border-left: medium none;" num="2.1396461023433764E-2">2.14%</td> <td class="xl68" style="border-left: medium none;" num="1.4264307348955842E-2">1.43%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="8.5585844093735049E-3">0.86%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="4.2792922046867524E-3">0.43%</td> </tr> <tr style="height: 13.5pt;" height="18"> <td class="xl74" style="height: 13.5pt;" num="25" height="18">$25.00 </td> <td class="xl70" style="border-left: medium none;" num="0.19412721186035389">19.41%</td> <td class="xl70" style="border-left: medium none;" num="9.7063605930176947E-2">9.71%</td> <td class="xl70" style="border-left: medium none;" num="6.4709070620117964E-2">6.47%</td> <td class="xl70" style="border-left: medium none;" num="4.8531802965088473E-2">4.85%</td> <td class="xl70" style="border-left: medium none;" num="2.4265901482544237E-2">2.43%</td> <td class="xl70" style="border-left: medium none;" num="1.6177267655029491E-2">1.62%</td> <td class="xl70" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="9.7063605930176947E-3">0.97%</td> <td class="xl70" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="4.8531802965088473E-3">0.49%</td> </tr> </tbody></table><br />You can see why this becomes incredibly appealing to DIYers with $30K or more invested in the portfolio. If I were to set the subscription fees at what I consider my midpoint (Rainbox suggests a $20/month fee, but that seems steep to me), $15/month equivocates to an annualized 1.24% expense ratio. That's in the ballpark of most mutual funds, only you're not obligated to make any trade you don't like. If your portfolio is bigger, in the $50K - $100K range or beyond, the savings are exponential. At some point, the cost of a "professionally run" portfolio decreases to below ETF levels, and eventually to almost negligent non existent levels. It offers complete control with investment manager research and advice. My expense ratios are higher than Rainbox's in part because I added in the "hassle" and "time cost" of managing your own portfolio. The "time cost" assumes trades take about 7 minutes each and your time is worth roughly $20/hour. The "hassle cost" component assumes you get the trade email and <span style="font-weight: bold;">wait to trade for 5 days</span>, either due to laziness, busy-ness, vacation, or any reason at all. It makes the assumption that for every day you wait to trade, you lose about 0.15% in profit. That's a fairly big assumption, as you could actually avoid losses by waiting, but adding it as a component makes it a more realistic model of how the subscription service would work.<br /><br />Want to know the kicker? <span style="font-weight: bold;">If you paid no one and totally self directed, a $20K portfolio costs you roughly 0.99% annualized fees using the assumptions above.</span> That's why online broker houses exist and seem so cheap - they are actually making fair sums of money off small accounts. An account of $10K with 50% turnover and 12 assets costs you about 1.98% per year - on the high end of just buying and holding a mutual fund! So here's a look at the same chart above, only the numbers reflect the <span style="font-weight: bold;">excess cost</span> of subscribing (as in, how much you are actually paying for a "management fee"):<br /><br /><span style="font-weight: bold;">"Management Fee" Breakdown:</span><br /><table str="" style="border-collapse: collapse; width: 531pt;" border="0" cellpadding="0" cellspacing="0" width="710"><col style="width: 83pt;" width="110"> <col style="width: 56pt;" span="8" width="75"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl69" style="height: 12.75pt; width: 83pt;" height="17" width="110">Subscription</td> <td class="xl71" style="border-left: medium none; width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> <td class="xl72" style="width: 56pt;" width="75"><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl65" style="height: 12.75pt;" height="17">Fee</td> <td class="xl66" style="border-left: medium none;" num="2500">$2,500</td> <td class="xl67" num="5000">$5,000</td> <td class="xl67" num="7500">$7,500</td> <td class="xl67" num="10000">$10,000</td> <td class="xl67" num="20000">$20,000</td> <td class="xl67" num="30000">$30,000</td> <td class="xl67" num="50000">$50,000</td> <td class="xl67" num="100000">$100,000</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="7.5" height="17">$7.50 </td> <td class="xl68" style="border-left: medium none;" num="3.4433285509325673E-2">3.44%</td> <td class="xl68" style="border-left: medium none;" num="1.7216642754662836E-2">1.72%</td> <td class="xl68" style="border-left: medium none;" num="1.1477761836441891E-2">1.15%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="8.6083213773314182E-3">0.86%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="4.3041606886657091E-3">0.43%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="2.8694404591104727E-3">0.29%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="1.7216642754662838E-3">0.17%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="8.6083213773314191E-4">0.09%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="10" height="17">$10.00 </td> <td class="xl68" style="border-left: medium none;" num="4.5911047345767564E-2">4.59%</td> <td class="xl68" style="border-left: medium none;" num="2.2955523672883782E-2">2.30%</td> <td class="xl68" style="border-left: medium none;" num="1.5303682448589193E-2">1.53%</td> <td class="xl68" style="border-left: medium none;" num="1.1477761836441891E-2">1.15%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="5.7388809182209455E-3">0.57%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="3.8259206121472981E-3">0.38%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="2.2955523672883787E-3">0.23%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="1.1477761836441894E-3">0.11%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="12.5" height="17">$12.50 </td> <td class="xl68" style="border-left: medium none;" num="5.7388809182209455E-2">5.74%</td> <td class="xl68" style="border-left: medium none;" num="2.8694404591104727E-2">2.87%</td> <td class="xl68" style="border-left: medium none;" num="1.9129603060736487E-2">1.91%</td> <td class="xl68" style="border-left: medium none;" num="1.4347202295552364E-2">1.43%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="7.1736011477761819E-3">0.72%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="4.7824007651841218E-3">0.48%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="2.8694404591104736E-3">0.29%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="1.4347202295552368E-3">0.14%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="15" height="17">$15.00 </td> <td class="xl68" style="border-left: medium none;" num="6.8866571018651346E-2">6.89%</td> <td class="xl68" style="border-left: medium none;" num="3.4433285509325673E-2">3.44%</td> <td class="xl68" style="border-left: medium none;" num="2.2955523672883789E-2">2.30%</td> <td class="xl68" style="border-left: medium none;" num="1.7216642754662836E-2">1.72%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="8.6083213773314182E-3">0.86%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="5.7388809182209472E-3">0.57%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="3.4433285509325685E-3">0.34%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="1.7216642754662843E-3">0.17%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="17.5" height="17">$17.50 </td> <td class="xl68" style="border-left: medium none;" num="8.0344332855093265E-2">8.03%</td> <td class="xl68" style="border-left: medium none;" num="4.0172166427546632E-2">4.02%</td> <td class="xl68" style="border-left: medium none;" num="2.6781444285031084E-2">2.68%</td> <td class="xl68" style="border-left: medium none;" num="2.0086083213773316E-2">2.01%</td> <td class="xl68" style="border-left: medium none;" num="1.0043041606886658E-2">1.00%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="6.6953610712577709E-3">0.67%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="4.0172166427546625E-3">0.40%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="2.0086083213773313E-3">0.20%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl73" style="height: 12.75pt;" num="20" height="17">$20.00 </td> <td class="xl68" style="border-left: medium none;" num="9.1822094691535155E-2">9.18%</td> <td class="xl68" style="border-left: medium none;" num="4.5911047345767578E-2">4.59%</td> <td class="xl68" style="border-left: medium none;" num="3.0607364897178385E-2">3.06%</td> <td class="xl68" style="border-left: medium none;" num="2.2955523672883789E-2">2.30%</td> <td class="xl68" style="border-left: medium none;" num="1.1477761836441894E-2">1.15%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="7.6518412242945963E-3">0.77%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="4.5911047345767574E-3">0.46%</td> <td class="xl68" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="2.2955523672883787E-3">0.23%</td> </tr> <tr style="height: 13.5pt;" height="18"> <td class="xl74" style="height: 13.5pt;" num="25" height="18">$25.00 </td> <td class="xl70" style="border-left: medium none;" num="0.11477761836441894">11.48%</td> <td class="xl70" style="border-left: medium none;" num="5.7388809182209469E-2">5.74%</td> <td class="xl70" style="border-left: medium none;" num="3.8259206121472981E-2">3.83%</td> <td class="xl70" style="border-left: medium none;" num="2.8694404591104734E-2">2.87%</td> <td class="xl70" style="border-left: medium none;" num="1.4347202295552367E-2">1.43%</td> <td class="xl70" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="9.5648015303682454E-3">0.96%</td> <td class="xl70" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="5.7388809182209472E-3">0.57%</td> <td class="xl70" style="border-left: medium none; background: lime none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial;" num="2.8694404591104736E-3">0.29%</td> </tr> </tbody></table><br />At the mid price point of $15/month, the equivalent management fee is <span style="font-weight: bold;">only 0.86% for a $20K portfolio</span>. That's not too shabby, considering most management fees run between 0.50% and 1.00% for mutual funds, and up to 2.00% for hedge funds. The nice part is, <span style="font-weight: bold;">as the portfolio size increases, your management fee decreases!</span><br /><br />So how do I get paid? The subscription fees go to me, though there are expenses I would incur in utilizing the service. For one, I incur the credit card processing fees, plus a 25% commission fee to Rainbox. Here's how much I would make based on subscriber accounts:<br /><br /><span style="font-weight: bold;">Smug Income Breakdown:</span><br /><table str="" style="border-collapse: collapse; width: 514pt;" border="0" cellpadding="0" cellspacing="0" width="685"><col style="width: 73pt;" width="97"> <col style="width: 63pt;" span="7" width="84"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl65" style="height: 12.75pt; width: 73pt;" height="17" width="97">Subscription</td> <td colspan="7" class="xl69" style="border-left: medium none; width: 441pt;" width="588">ACCOUNTS</td> </tr> <tr style="height: 13.5pt;" height="18"> <td class="xl66" style="height: 13.5pt;" height="18">Fee</td> <td class="xl67" style="border-left: medium none;" num="">1</td> <td class="xl68" num="">5</td> <td class="xl68" num="">10</td> <td class="xl68" num="">25</td> <td class="xl68" num="">50</td> <td class="xl68" num="">75</td> <td class="xl68" num="">100</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl71" style="height: 12.75pt;" num="7.5" height="17">$7.50 </td> <td class="xl73" style="border-left: medium none;" num="-47.539249999999996">-$47.54</td> <td class="xl73" style="border-left: medium none;" num="-6.0962500000000004">-$6.10</td> <td class="xl73" style="border-left: medium none;" num="23.2075">$23.21</td> <td class="xl73" style="border-left: medium none;" num="105.11875000000001">$105.12</td> <td class="xl73" style="border-left: medium none;" num="239.63749999999999">$239.64</td> <td class="xl73" style="border-left: medium none;" num="373.82291666666663">$373.82</td> <td class="xl73" style="border-left: medium none;" num="507.92500000000001">$507.93</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl71" style="height: 12.75pt;" num="10" height="17">$10.00 </td> <td class="xl73" style="border-left: medium none;" num="-45.719000000000001">-$45.72</td> <td class="xl73" style="border-left: medium none;" num="3.0049999999999999">$3.01</td> <td class="xl73" style="border-left: medium none;" num="41.41">$41.41</td> <td class="xl73" style="border-left: medium none;" num="150.625">$150.63</td> <td class="xl73" style="border-left: medium none;" num="330.65">$330.65</td> <td class="xl73" style="border-left: medium none;" num="510.3416666666667">$510.34</td> <td class="xl73" style="border-left: medium none;" num="689.95">$689.95</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl71" style="height: 12.75pt;" num="12.5" height="17">$12.50 </td> <td class="xl73" style="border-left: medium none;" num="-43.89875">-$43.90</td> <td class="xl73" style="border-left: medium none;" num="12.106249999999999">$12.11</td> <td class="xl73" style="border-left: medium none;" num="59.612499999999997">$59.61</td> <td class="xl73" style="border-left: medium none;" num="196.13124999999999">$196.13</td> <td class="xl73" style="border-left: medium none;" num="421.66250000000002">$421.66</td> <td class="xl73" style="border-left: medium none;" num="646.86041666666665">$646.86</td> <td class="xl73" style="border-left: medium none;" num="871.97500000000002">$871.98</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl71" style="height: 12.75pt;" num="15" height="17">$15.00 </td> <td class="xl73" style="border-left: medium none;" num="-42.078499999999998">-$42.08</td> <td class="xl73" style="border-left: medium none;" num="21.2075">$21.21</td> <td class="xl73" style="border-left: medium none;" num="77.814999999999998">$77.82</td> <td class="xl73" style="border-left: medium none;" num="241.63749999999999">$241.64</td> <td class="xl73" style="border-left: medium none;" num="512.67499999999995">$512.68</td> <td class="xl73" style="border-left: medium none;" num="783.37916666666661">$783.38</td> <td class="xl73" style="border-left: medium none;" num="1054">$1,054.00</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl71" style="height: 12.75pt;" num="17.5" height="17">$17.50 </td> <td class="xl73" style="border-left: medium none;" num="-40.258250000000004">-$40.26</td> <td class="xl73" style="border-left: medium none;" num="30.30875">$30.31</td> <td class="xl73" style="border-left: medium none;" num="96.017499999999998">$96.02</td> <td class="xl73" style="border-left: medium none;" num="287.14375000000001">$287.14</td> <td class="xl73" style="border-left: medium none;" num="603.6875">$603.69</td> <td class="xl73" style="border-left: medium none;" num="919.89791666666679">$919.90</td> <td class="xl73" style="border-left: medium none;" num="1236.0250000000001">$1,236.03</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl71" style="height: 12.75pt;" num="20" height="17">$20.00 </td> <td class="xl73" style="border-left: medium none;" num="-38.438000000000002">-$38.44</td> <td class="xl73" style="border-left: medium none;" num="39.41">$39.41</td> <td class="xl73" style="border-left: medium none;" num="114.22">$114.22</td> <td class="xl73" style="border-left: medium none;" num="332.65">$332.65</td> <td class="xl73" style="border-left: medium none;" num="694.7">$694.70</td> <td class="xl73" style="border-left: medium none;" num="1056.4166666666667">$1,056.42</td> <td class="xl73" style="border-left: medium none;" num="1418.05">$1,418.05</td> </tr> <tr style="height: 13.5pt;" height="18"> <td class="xl72" style="height: 13.5pt;" num="25" height="18">$25.00 </td> <td class="xl74" style="border-left: medium none;" num="-34.797499999999999">-$34.80</td> <td class="xl74" style="border-left: medium none;" num="57.612499999999997">$57.61</td> <td class="xl74" style="border-left: medium none;" num="150.625">$150.63</td> <td class="xl74" style="border-left: medium none;" num="423.66250000000002">$423.66</td> <td class="xl74" style="border-left: medium none;" num="876.72500000000002">$876.73</td> <td class="xl74" style="border-left: medium none;" num="1329.4541666666667">$1,329.45</td> <td class="xl74" style="border-left: medium none;" num="1782.1">$1,782.10</td> </tr> </tbody></table><br />The breakeven is pretty low at 5 accounts for all but the cheapest subscription price. In fact, if I charged only $0.99/month, I'd only need about 40 accounts to barely break even after costs.<br /><br />It sounds excellent in theory to me as a way to a.) create income for Smug and tap into a wider audience, and b.) allow investors to make their own choices at a minimum of cost. A new paradigm, right?<br /><br />Well, I'm not entirely sure. First of all, the likelihood of DIYer's paying for advice is low, and the likelihood that online readers would subscribe and have $30K+ to invest solely in Smug's models is even lower. Rainbox is in beta form right now and actively soliciting managers (like me) to not only give it some credibility, but to help launch it successfully. The question I have is: will it work? I've set up a poll to the right side, I'm wondering how much you, the interested green investor, would be willing to pay for a subscription service like this? Nothing? $1.00 per month? $20.00 per month?<br /><br />Comments and criticism appreciated, I'm looking to make a decision whether or not to offer the service in the coming weeks. Look out for more green commentary in the next few days, and a profile of the environmental services ETF, <a href="http://finance.google.com/finance?q=evx">EVX</a>.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-66847775501179141732008-07-22T10:43:00.002-04:002008-07-22T10:43:06.355-04:00Dividends: The Green Investor's AtlantisBig media attention distracts from the fact that green is still a niche investors' market. As more and more utility companies sign on to green initiatives, steady yielding dividends should get easier to come by. Until then, there are ways to piece together some nice income, albeit more unstable than traditional income vehicles.<br /><br />I've put together, at the request of a <a href="http://seekingalpha.com/article/85717-the-anti-s-p-500-green-portfolio-lower-correlation-lower-volatility">Seeking Alpha commenter</a> (thanks EnfantTerribles) a <span style="font-weight: bold;">Sort Of Incredible Green Income Machine</span>. Here's the list, with some suggested allocations as well:<br /><br /><table str="" style="border-collapse: collapse; width: 247pt;" border="0" cellpadding="0" cellspacing="0" width="329"><col style="width: 48pt;" width="64"> <col style="width: 49pt;" width="65"> <col style="width: 48pt;" width="64"> <col style="width: 9pt;" width="12"> <col style="width: 93pt;" width="124"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt; width: 48pt;" height="17" width="64">Asset</td> <td class="xl27" style="width: 49pt;" width="65">100.00%</td> <td class="xl24" style="width: 48pt;" width="64">Yield</td> <td style="width: 9pt;" width="12"><br /></td> <td class="xl24" style="width: 93pt;" width="124">Portfolio Yield</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=paxhx&hl=en">PAXHX</a></td> <td class="xl25" num="0.17499999999999999">17.50%</td> <td class="xl25" num="7.434944237918216E-2">7.43%</td> <td><br /></td> <td class="xl25" num="1.3011152416356878E-2" fmla="=IF(C2="","",B2*C2)">1.30%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=cratx&hl=en">CRATX</a></td> <td class="xl25" num="0.15">15.00%</td> <td class="xl25" num="4.6376811594202899E-2">4.64%</td> <td><br /></td> <td class="xl25" num="6.956521739130435E-3" fmla="=IF(C3="","",B3*C3)">0.70%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=dsbfx&hl=en">DSBFX</a></td> <td class="xl25" num="0.15">15.00%</td> <td class="xl25" num="4.4692737430167599E-2">4.47%</td> <td><br /></td> <td class="xl25" num="6.7039106145251395E-3" fmla="=IF(C4="","",B4*C4)">0.67%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=csibx&hl=en">CSIBX</a></td> <td class="xl25" num="0.1">10.00%</td> <td class="xl25" num="3.8684719535783368E-2">3.87%</td> <td><br /></td> <td class="xl25" num="3.868471953578337E-3" fmla="=IF(C5="","",B5*C5)">0.39%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=dupfx&hl=en">DUPFX</a></td> <td class="xl25" num="0.05">5.00%</td> <td class="xl25" num="3.125E-2">3.13%</td> <td><br /></td> <td class="xl25" num="1.5625000000000001E-3" fmla="=IF(C6="","",B6*C6)">0.16%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=lry&hl=en">LRY</a></td> <td class="xl25" num="0.155">15.50%</td> <td class="xl25" num="7.2780203784570591E-2">7.28%</td> <td><br /></td> <td class="xl25" num="1.1280931586608442E-2" fmla="=IF(C7="","",B7*C7)">1.13%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=ida&hl=en">IDA</a></td> <td class="xl25" num="0.1">10.00%</td> <td class="xl25" num="4.0664181633344627E-2">4.07%</td> <td><br /></td> <td class="xl25" num="4.0664181633344627E-3" fmla="=IF(C8="","",B8*C8)">0.41%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=wfmi&hl=en">WFMI</a></td> <td class="xl25" num="0.05">5.00%</td> <td class="xl25" num="3.4635879218472471E-2">3.46%</td> <td><br /></td> <td class="xl25" num="1.7317939609236236E-3" fmla="=IF(C9="","",B9*C9)">0.17%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=wtr&hl=en">WTR</a></td> <td class="xl25" num="0.03">3.00%</td> <td class="xl25" num="3.2851511169513799E-2">3.29%</td> <td><br /></td> <td class="xl25" num="9.8554533508541384E-4" fmla="=IF(C10="","",B10*C10)">0.10%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=ora&hl=en">ORA</a></td> <td class="xl25" num="0.02">2.00%</td> <td class="xl25" num="4.2607584149978702E-3">0.43%</td> <td><br /></td> <td class="xl25" num="8.5215168299957402E-5" fmla="=IF(C11="","",B11*C11)">0.01%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=lnn&hl=en">LNN</a></td> <td class="xl25" num="0.02">2.00%</td> <td class="xl25" num="3.3881897386253633E-3">0.34%</td> <td><br /></td> <td class="xl25" num="6.7763794772507269E-5" fmla="=IF(C12="","",B12*C12)">0.01%</td> </tr> </tbody></table><br /><table str="" style="border-collapse: collapse; width: 59pt;" border="0" cellpadding="0" cellspacing="0" width="79"><col style="width: 59pt;" width="79"> <tbody><tr style="height: 12.75pt; font-weight: bold;" height="17"> <td class="xl24" style="height: 12.75pt; width: 59pt;" height="17" width="79">Total Yield:</td> </tr> <tr style="height: 12.75pt; font-weight: bold;" height="17"> <td class="xl25" style="height: 12.75pt;" num="5.0320224732615201E-2" height="17">5.03%</td> </tr> </tbody></table><br /><table str="" style="border-collapse: collapse; width: 131pt;" border="0" cellpadding="0" cellspacing="0" width="174"><col style="width: 83pt;" width="110"> <col style="width: 48pt;" width="64"> <tbody><tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt; width: 83pt;" height="17" width="110">Agriculture</td> <td class="xl24" style="width: 48pt;" num="0.07" align="right" width="64">7.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Bond</td> <td class="xl24" num="0.625" align="right">62.50%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Diversity</td> <td class="xl24" num="0" align="right">0.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Eco Reserve</td> <td class="xl24" num="0" align="right">0.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Energy</td> <td class="xl24" num="0.12" align="right">12.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Low Carbon</td> <td class="xl24" num="0" align="right">0.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Real Estate</td> <td class="xl24" num="0.155" align="right">15.50%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Recycle</td> <td class="xl24" num="0" align="right">0.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Social</td> <td class="xl24" num="0" align="right">0.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Technology</td> <td class="xl24" num="0" align="right">0.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Total Green</td> <td class="xl24" num="0" align="right">0.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Water</td> <td class="xl24" num="0.03" align="right">3.00%</td> </tr> </tbody></table><br /><br /><br />As you can see, the majority of the holding are bonds, which isn't ideal for diversification's sake. All the yields listed are based on <span style="font-weight: bold;">Friday (7/18) closing prices and the last dividend paid</span>. They are most definitely not guaranteed, but the Smug systems do their best to weed out inconsistent payers. There are some non bond holdings worth looking at, and some stock holdings as well yielding above 3%. The overall stock allocation, however, falls less than 50% at around 38% instead. That should give some cushion for growth amongst the bonds and hopefully continue to <span style="font-weight: bold;">flirt with that 5% yield mark</span>.<br /><br />Because of the high concentration in yielding bond mutual funds, there isn't much in the way of inter-green diversity either. Real estate is an obvious place for steady yields, and our one traded "almost green-ish" real estate stock pick, Liberty Property Trust (LRY), makes for a nice yield especially now that real estate prices have tumbled despite ever consistent cash flows. If those cash flows dry up, though, better watch out. Also in the stockpile is IdaCorp (IDA), an Idaho based energy company generating most of it's energy from hydroelectric sources. Utility companies are usually recession-proof tools, so I wouldn't be surprised to see the price tumble a bit if serious recession concerns start to fade in the backdrop. That said, over the last 7 years the price has remained fairly consistently around the $30/share mark, possibly a good sign for forward stability as well.<br /><br />I also included Whole Foods Market, Inc (WFMI), as they are a nice solid yielder, but as a "specialty" grocery store with food prices on the rise, it's a bit of a risky play. If you're looking for a really steady yield without as much volatility involved, stick with the mutual fund options. Domini, Pax World, and Communtiy Capital Management are old hands with solid business models. PAXHX clocks in as the cheapest overall bang for you buck - currently a 7% yield, a 1% expense ratio, and a measly $250 minimum!<br /><br />All in all, it's wise to tread lightly looking for green dividends. I wouldn't be surprised if they start cropping up here and there in the not too distant future, especially with the first pure green REIT on the horizon (in SEC filing stage), but for now, be careful and don't expect great stability except from some of the tried and true stalwart bond funds.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-91648185254563573022008-07-21T08:33:00.000-04:002008-07-21T08:33:00.495-04:00Quick Links<a href="http://www.fool.com/investing/general/2008/07/09/measuring-green-investing-success.aspx">Renaissance Capital announced it's Green IPO index</a>. Hold your breath for when the CBOE gets a hold of it - we'll have a green futures market in earnest!<br /><br />Apparently, it's not just us normal joes who see green in Green - <a href="http://www.socialfunds.com/news/article.cgi/2530.html">the richest of the rich are making tracks</a>. Now, if only my phone would ring....<br /><br />Environmental emissions will make it <a href="http://seekingalpha.com/article/85482-emissions-infrastructure-costs-post-threat-to-electric-utilities">harder for traditional industry</a> to compete with green. Duh.<br /><br />Not only are the richest of the rich going green, the <a href="http://www.investorideas.com/Companies/ViewDocument.asp?ID=5495">smartest of the smart</a> are too.<br /><br /><a href="http://www.socialfunds.com/news/article.cgi/2519.html">Community Investing is fully subscribed</a>.<br /><br />If you have links you want to submit, email them to links(at)smuginvestments.com.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-6758251596843341392008-07-18T17:17:00.003-04:002008-07-18T17:25:40.155-04:00Error in Seeking Alpha ArticleFor those of you who read my <a href="http://seekingalpha.com/article/85717-the-anti-s-p-500-green-portfolio-lower-correlation-lower-volatility">recent post on Seeking Alpha</a>, a math error was pointed out to me (it was a late night and Excel was not my friend). The point still remains the same, but the numbers are much more reasonable - here is the revised chart:<br /><br /><table str="" style="border-collapse: collapse; width: 270pt;" border="0" cellpadding="0" cellspacing="0" width="360"><col style="width: 54pt;" span="5" width="72"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt; width: 54pt;" height="17" width="72">CGW</td> <td class="xl26" style="width: 54pt;" num="-0.13222509534899385" width="72">-13.22%</td> <td class="xl25" style="width: 54pt;" width="72"><br /></td> <td class="xl24" style="width: 54pt;" width="72">CGW</td> <td class="xl26" style="width: 54pt;" num="-0.13222509534899385" width="72">-13.22%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">EVX</td> <td class="xl26" num="-2.8568386561689647E-2">-2.86%</td> <td class="xl25"><br /></td> <td class="xl24">DBA</td> <td class="xl26" num="0.44875815966190713">44.88%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">GEX</td> <td class="xl26" num="0.14390290350025617">14.39%</td> <td class="xl25"><br /></td> <td class="xl24">DSI</td> <td class="xl26" num="-0.20614053620906519">-20.61%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">PBD</td> <td class="xl26" num="-3.5444320408616198E-2">-3.54%</td> <td class="xl25"><br /></td> <td class="xl24">EVX</td> <td class="xl26" num="-2.8568386561689647E-2">-2.86%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">PBW</td> <td class="xl26" num="-9.0644685601284275E-2">-9.06%</td> <td class="xl25"><br /></td> <td class="xl24">EWZ</td> <td class="xl26" num="0.30049589310671609">30.05%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">PHO</td> <td class="xl26" num="-4.6525844039166306E-2">-4.65%</td> <td class="xl25"><br /></td> <td class="xl24">FXA</td> <td class="xl26" num="0.11994763150581787">11.99%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">PUW</td> <td class="xl26" num="-8.9105692916552251E-2">-8.91%</td> <td class="xl25"><br /></td> <td class="xl24">PAXHX</td> <td class="xl26" num="-6.6747902556432093E-2">-6.67%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">PZD</td> <td class="xl26" num="2.4122961333622722E-2">2.41%</td> <td class="xl25"><br /></td> <td class="xl24">PBD</td> <td class="xl26" num="-3.5444320408616198E-2">-3.54%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17"><br /></td> <td class="xl26"><br /></td> <td class="xl25"><br /></td> <td class="xl24">PZD</td> <td class="xl26" num="2.4122961333622722E-2">2.41%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17">S&P 500</td> <td class="xl26" num="-0.19692713706603393">-19.69%</td> <td class="xl25"><br /></td> <td class="xl24">UDN</td> <td class="xl26" num="0.12039843264823907">12.04%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17"><br /></td> <td class="xl24"><br /></td> <td class="xl25"><br /></td> <td class="xl24"><br /></td> <td class="xl26"><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17"><br /></td> <td class="xl24"><br /></td> <td class="xl24"><br /></td> <td class="xl24">S&P 500</td> <td class="xl26" num="-0.19692713706603393">-19.69%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt;" height="17"><br /></td> <td class="xl24"><br /></td> <td class="xl24"><br /></td> <td class="xl24"><br /></td> <td class="xl24"><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl27" style="height: 12.75pt;" height="17">Overall:</td> <td class="xl28" num="-3.1811020005302948E-2" fmla="=AVERAGE(B1:B8)" align="right">-3.18%</td> <td class="xl24"><br /></td> <td class="xl27">Overall:</td> <td class="xl28" num="5.4459683717150598E-2" fmla="=AVERAGE(E1:E10)" align="right">5.45%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl27" style="height: 12.75pt;" height="17">v S&P:</td> <td class="xl28" num="0.16511611706073098" fmla="=B14-B10" align="right">16.51%</td> <td class="xl24"><br /></td> <td class="xl27">v S&P:</td> <td class="xl28" num="0.25138682078318453" fmla="=E14-E12" align="right">25.14%</td> </tr> </tbody></table><br />The overall performance was -3.18% versus the overall performance of 5.45% in the diversified portfolio, <span style="font-weight: bold;">an 8.63% swing</span>.<br /><br />That looks MUCH better, I was wondering what happened! Don't let my late night typos fool you, the strategy still works, especially in the long run. Thanks to imagomundi for catching the error!Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-82211250327634928732008-07-17T14:18:00.000-04:002008-07-17T14:18:01.228-04:00Green Investing on a Budget: $10K PortfolioSo you have $10,000, you've read <a href="http://smuginvestments.blogspot.com/2008/07/green-investing-on-budget-set-yourself.html">yesterday's post</a>, you're all set up and ready to invest responsibly, and you have no idea where to start. First, you can start with our earlier posts: <a href="http://smuginvestments.blogspot.com/2008/05/biocapacity-consuming-like-american.html">here</a>, <a href="http://seekingalpha.com/article/83074-a-beginners-guide-to-green-investing?source=commenter">here</a>, and <a href="http://seekingalpha.com/article/83720-green-commodities-for-a-complete-green-portfolio?source=commenter">here</a>. It lays the baseline for what I'll talk about in terms of asset allocation.<br /><br />Here are some good suggested portfolios for the $10K investor at varying risk tolerance / time horizon levels:<br /><br />Concept: Complete Portfolio<br />Risk Level: High Risk<br />Timing: Long Horizon (5+ years)<br />Suggested Allocations:<br /><br /><table str="" style="border-collapse: collapse; width: 233pt;" border="0" cellpadding="0" cellspacing="0" width="311"><col style="width: 60pt;" width="80"> <col style="width: 48pt;" span="2" width="64"> <col style="width: 77pt;" width="103"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt; width: 60pt;" height="17" width="80"><a href="http://finance.google.com/finance?q=PAXHX&hl=en&meta=hl%3Den">PAXHX</a></td> <td class="xl27" style="width: 48pt;" num="0.14499999999999999" width="64">14.50%</td> <td class="xl28" style="width: 48pt;" num="1450" width="64">$1,450</td> <td class="xl24" style="width: 77pt;" width="103">Bond</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=DBA&hl=en&meta=hl%3Den">DBA</a></td> <td class="xl27" num="0.17499999999999999">17.50%</td> <td class="xl28" num="1750">$1,750</td> <td class="xl24">Agriculture</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=EVX&hl=en&meta=hl%3Den">EVX</a></td> <td class="xl27" num="0.15">15.00%</td> <td class="xl28" num="1500">$1,500</td> <td class="xl24">Recycle</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=GRN&hl=en&meta=hl%3Den">GRN</a></td> <td class="xl27" num="0.16500000000000001">16.50%</td> <td class="xl28" num="1650">$1,650</td> <td class="xl24">Low Carbon</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=PBD&hl=en&meta=hl%3Den">PBD</a></td> <td class="xl27" num="0.185">18.50%</td> <td class="xl28" num="1850">$1,850</td> <td class="xl24">Energy</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=DSI&hl=en&meta=hl%3Den">DSI</a></td> <td class="xl27" num="0.15">15.00%</td> <td class="xl28" num="1500">$1,500</td> <td class="xl24">Social</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Cash</td> <td class="xl27" num="0.03">3.00%</td> <td class="xl28" num="300">$300</td> <td><br /></td> </tr> </tbody></table><br />In this scenario, the one mutual fund, Pax World High Yield, adds bond exposure to round out the overall holdings. It has an average expense ratio (roughly 1%) and a very low minimum at $250 for non IRA accounts (IRAs have no minimum), so it fits well amongst the ETFs. DBA makes an excellent hedge in agriculture, as well. I couch this allocation with the disclaimer that many of the other pieces are correlated, since achieving maximum diversity with $10,000 is difficult to do. You should see some nice diversification with the agriculture play (typically, agriculture is zero to negatively correlated to the S&P) and the bond play making over 30% of the portfolio non correlated. In the future, it may make sense to add TAN, FAN, or FUE, the solar, wind, and biofuel ETFs, but for now, PBD covers all those bases. The second portfolio is for more green specific biased investors who only want $10,000 of coverage in their total portfolio, in which case more risk is warranted (and unavoidable).<br /><br />Concept: Total Green<br />Risk Level: High Risk<br />Timing: Long Horizon (5+ years)<br />Suggested Allocations:<br /><br /><table str="" style="border-collapse: collapse; width: 233pt;" border="0" cellpadding="0" cellspacing="0" width="311"><col style="width: 60pt;" width="80"> <col style="width: 48pt;" span="2" width="64"> <col style="width: 77pt;" width="103"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt; width: 60pt;" height="17" width="80"><a href="http://finance.google.com/finance?q=EVX&hl=en&meta=hl%3Den">EVX</a></td> <td class="xl27" style="width: 48pt;" num="0.15" width="64">15.00%</td> <td class="xl28" style="width: 48pt;" num="1500" width="64">$1,500</td> <td class="xl24" style="width: 77pt;" width="103">Recycle</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=FAN&hl=en&meta=hl%3Den">FAN</a></td> <td class="xl27" num="0.1">10.00%</td> <td class="xl28" num="1000">$1,000</td> <td class="xl24">Energy</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=FUE&hl=en&meta=hl%3Den">FUE</a></td> <td class="xl27" num="0.1">10.00%</td> <td class="xl28" num="1000">$1,000</td> <td class="xl24">Energy</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=GRN&hl=en&meta=hl%3Den">GRN</a></td> <td class="xl27" num="0.15">15.00%</td> <td class="xl28" num="1500">$1,500</td> <td class="xl24">Low Carbon</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=PBD&hl=en&meta=hl%3Den">PBD</a></td> <td class="xl27" num="0.1">10.00%</td> <td class="xl28" num="1000">$1,000</td> <td class="xl24">Energy</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=PHO&hl=en&meta=hl%3Den">PHO</a></td> <td class="xl27" num="0.15">15.00%</td> <td class="xl28" num="1500">$1,500</td> <td class="xl24">Water</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=PZD&hl=en&meta=hl%3Den">PZD</a></td> <td class="xl27" num="0.12">12.00%</td> <td class="xl28" num="1200">$1,200</td> <td class="xl24">Technology</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl26" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=TAN&hl=en&meta=hl%3Den">TAN</a></td> <td class="xl27" num="0.1">10.00%</td> <td class="xl28" num="1000">$1,000</td> <td class="xl24">Energy</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Cash</td> <td class="xl27" num="0.03">3.00%</td> <td class="xl28" num="300">$300</td> <td><br /></td> </tr> </tbody></table><br />Overall, this is 40% in green energies - biofuel, solar, wind, and a combination of all forms in PBD. Because it's technology intensive, it will have some pretty high beta and some pretty volatile motion. Ultimately, it's a position play in a larger portfolio, and not well suited to a $10K only investor. The water and recycling components (PHO and EVX respectively) round out the total green theme, with some carbon (GRN) thrown in as well. This portfolio is not for the faint of heart, and I certainly wouldn't recommend it to anyone as their total portfolio. But as a green piece that you can leave alone for a good long while, it's worth considering.<br /><br />In the next few posts, I'll detail some low(er) risk $10K portfolios, and I'm going to start focusing on some day trading as well. Look out for more!Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-58559040997062077262008-07-14T12:59:00.006-04:002008-07-14T17:07:30.397-04:00Green Investing on a Budget: Set Yourself UpLet's be honest - 90% of investors fall below the $1M net worth requirement for many of the hedge type assets available to institutional types. In fact, as more and more high net worth individuals turn to alternative assets to complete their portfolios, <span style="font-weight: bold;">most of us</span> are stuck with either 1.) 401(k)'s run by someone else with broad, if not comical, options, or 2.) amounts too low to qualify for much in the way of diversification (see <a href="http://smuginvestments.blogspot.com/2008/07/risk-and-green-investing.html">here</a> for why diversification is important).<br /><br />In light of this fact, it makes sense to review the way a <span style="font-weight: bold;">$10,000 do-it-yourself-er can invest green and be diversified.</span> It's definitely possible to have a responsible, diversified portfolio with $10,000. To do it, we considered the following things as paramount:<br /><br /><span style="font-weight: bold;">1.) Liquidity is a must</span>. $10,000, even in a self directed IRA, should be almost entirely liquid. Typically, investors with only $10,000 in investable assets are in the accrual phase of investing, and may need to draw for big item purchases like a real estate or schooling. It makes sense to <span style="font-weight: bold;">be liquid and stay liquid</span> where possible.<br /><br /><span style="font-weight: bold;">2.) Avoid fees where possible</span>. Avoiding fees is impossible - everyone charges you for everything you want to do in this country, especially when they think you won't notice. It is <span style="font-weight: bold;">absolutely imperative</span> to look at the fees for what you're investing. Can't get through the legalese? <span style="font-weight: bold;">Email me - I'll do it for free</span>. Fees, while the necessary bane of investing, can be limited by doing research and being prepared. The first and most important fees to understand are <span style="font-weight: bold;">the trading fees</span>. There is a great, competitive field for online discount brokerages now, and fees can be reasonable. Still, do some reading and find what's right for you - I use optionsXpress personally and love them, but read <a href="http://www.dailyreckoning.com/rpt/BestOnlineBrokers.html">this</a> and <a href="http://www.stocktradingtogo.com/2007/05/31/5-top-online-stock-brokers/">this</a> when considering some of the bigger (and smaller) online firms. My advice: stay away from the Fidelity's and Merrill Lynch's of the world. If you already have a broker you like (or you have no choice about), read every prospectus when determining how much you're paying for someone to manage your investment.<br /><br /><span style="font-weight: bold;">3.) Unless you watch the markets daily, avoid turnover and emotional selling</span>. This is a really basic rule, and easily the most difficult to follow. As a portfolio manager, it doesn't get easier. I bought AAPL stock on November 19, 2007 for $164.92 after fees. By December 31, 2007, it closed at $198.08, a solid 20.1% gain. As a long holder, I kept holding and watched my shares hit a low of $119.15 of February 26, 2008 close. That's a rollercoaster of up 20.1% to down -27.8% in a matter of 3 months - <span style="font-weight: bold;">a 47.9% swing!</span> The point? <span style="font-weight: bold;">This will happen, and probably to you</span>. Stock timing is like playing roulette. The best advice is <span style="font-weight: bold;">don't try to time the market</span>. Even Mark Twain said, "Buy good quality common stocks and hold 'em until they go up. If they don't go up, don't buy 'em." Green investments will go up and down, there will be good news and bad news, and the talking heads will blast it and praise it. Don't listen to sensationalism. Besides, <span style="font-weight: bold;">if you've seen it on the news, you're already too late</span>. <br /><br />What about turnover? Well, that's just simple math - if you invest $10,000, a $15 trade fee represents 0.15% per trade. If you have a portfolio of 10 assets and you traded quarterly? - you're looking at being down 1.50% per quarter just in trade fees, or <span style="font-weight: bold;">down 6% per year</span>. That adds up quick, and digs deep into your returns. So keep the trades to a minimum in smaller accounts, or you'll end up on the losing end of trading fees!<br /><br /><span style="font-weight: bold;">4.) Be S.U.R.E. when you invest. </span>At the risk of being cliche and using a ridiculous acronym, it helps remember. Whenever you sit down to make an investment decision, be:<br /><span style="font-weight: bold;"><br />S</span>elf aware, understanding your investment situation - don't go for the home run if you can't afford the strikeout.<br /><br /><span style="font-weight: bold;">U</span>nderstand the costs involved.<br /><br /><span style="font-weight: bold;">R</span>esearch your investment. It's not enough to just know what you own, if you want to be responsible, know <span style="font-style: italic;">who</span> you own.<br /><br /><span style="font-weight: bold;">E</span>xecute and forget it. Assuming you're in it for the long hold, <span style="font-style: italic;">be in it for the long hold</span>. Set yourself timelines if you have to (ie, no portfolio review for 1 year).<br /><br />In the long term, especially using and index/ETF approach, there are very few total losers. In fact, even in the mutual fund world it's easy to look like a winner over the long term. If you're able invest, forget about it, and go on living, it's a good way to stay Zen.<br /><br />Tomorrow's post: our suggestions of what to buy.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-88155676913337080622008-07-11T09:36:00.001-04:002008-07-11T09:36:01.047-04:00Green Report Card: 2Q2008For basic retail investors, there are a lot of mutual fund options for green. We at Smug have steadily been analyzing some of them, at least in a superficial way (and in some more in depth ways), but with so many coming out, it makes sense to review them all in one place. Smug has created a basic scoring system that incorporates a combination of historical returns, risk measures (alpha, beta, R-squared, etc.), expense ratios, and front/back end load. It penalizes the youngest funds for the most part, but avoids overweighting funds simply for longevity. It's a good place to start if you don't know what you're looking for, and it combines some of our favorite green and socially responsible investments.<br /><br />The first report card is below. If there are funds that you know of that don't appear, feel free to comment and let me know, we're more than happy to assess every green based asset.<br /><br /><table str="" style="border-collapse: collapse; width: 754pt;" border="0" cellpadding="0" cellspacing="0" width="1005"><col style="width: 56pt;" width="75"> <col style="width: 293pt;" width="390"> <col style="width: 48pt;" width="64"> <col style="width: 51pt;" width="68"> <col style="width: 51pt;" span="5" width="68"> <col style="width: 51pt;" width="68"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt; width: 56pt;" height="17" width="75">Ticker</td> <td class="xl25" style="width: 293pt;" width="390">Fund</td> <td class="xl36" style="width: 48pt;" width="64">Score</td> <td class="xl28" style="width: 51pt;" width="68">YTD</td> <td class="xl28" style="width: 51pt;" width="68">1 Month</td> <td class="xl28" style="width: 51pt;" width="68">3 Month</td> <td class="xl28" style="width: 51pt;" width="68">1 Year</td> <td class="xl28" style="width: 51pt;" width="68">3 Year</td> <td class="xl28" style="width: 51pt;" width="68">5 Year</td> <td class="xl31" style="width: 51pt;" width="68">Expense</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=PAXHX&hl=en&meta=hl%3Den">PAXHX</a></td> <td class="xl27">Pax World High Yield A</td> <td class="xl35" num="">12</td> <td class="xl30" num="1.67E-2">1.67%</td> <td class="xl30" num="8.199999999999999E-3">0.82%</td> <td class="xl30" num="3.1699999999999999E-2">3.17%</td> <td class="xl30" num="1.7000000000000001E-2">1.70%</td> <td class="xl30" num="7.0699999999999999E-2">7.07%</td> <td class="xl30" num="7.4299999999999991E-2">7.43%</td> <td class="xl29" num="0.01" align="right">1.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" str="NALFX " height="17"><a href="http://finance.google.com/finance?q=NALFX&hl=en&meta=hl%3Den">NALFX<span style=""> </span></a></td> <td class="xl27">New Alternatives Fund A</td> <td class="xl35" num="">6</td> <td class="xl30" num="-3.3500000000000002E-2">-3.35%</td> <td class="xl30" num="4.2999999999999997E-2">4.30%</td> <td class="xl30" num="0.14449999999999999">14.45%</td> <td class="xl30" num="0.05">5.00%</td> <td class="xl30" num="0.22460000000000002">22.46%</td> <td class="xl30" num="0.19820000000000002">19.82%</td> <td class="xl29" num="9.4999999999999998E-3" align="right">0.95%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=TICRX&hl=en&meta=hl%3Den">TICRX</a></td> <td class="xl27">TIAA CREF Social Choice Equity</td> <td class="xl35" num="">6</td> <td class="xl30" num="-2.0499999999999997E-2">-2.05%</td> <td class="xl30" num="2.4300000000000002E-2">2.43%</td> <td class="xl30" num="7.0199999999999999E-2">7.02%</td> <td class="xl30" num="-6.3099999999999989E-2">-6.31%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29" num="2.0999999999999999E-3" align="right">0.21%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=AECOX&hl=en&meta=hl%3Den">AECOX</a></td> <td class="xl27">Allianz RCM Global EcoTrends Fund A</td> <td class="xl35" num="">5</td> <td class="xl30" num="-0.08">-8.00%</td> <td class="xl30" num="4.3899999999999995E-2">4.39%</td> <td class="xl30" num="0.155">15.50%</td> <td class="xl30" num="0.22769999999999999">22.77%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29">%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=SPEGX&hl=en&meta=hl%3Den">SPEGX</a></td> <td class="xl27">Spectra Green Fund</td> <td class="xl35" num="">4.5</td> <td class="xl30" num="-9.5299999999999996E-2">-9.53%</td> <td class="xl30" num="7.3000000000000001E-3">0.73%</td> <td class="xl30" num="3.7400000000000003E-2">3.74%</td> <td class="xl30" num="2.07E-2">2.07%</td> <td class="xl30" num="0.1593">15.93%</td> <td class="xl30" num="0.13550000000000001">13.55%</td> <td class="xl29" num="1.24E-2" align="right">1.24%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" str="PARWX " height="17"><a href="http://finance.google.com/finance?q=PARWX&hl=en&meta=hl%3Den">PARWX<span style=""> </span></a></td> <td class="xl27">Parnassus Workplace Fund</td> <td class="xl35" num="">3</td> <td class="xl30" num="3.39E-2">3.39%</td> <td class="xl30" num="3.4099999999999998E-2">3.41%</td> <td class="xl30" num="0.11070000000000001">11.07%</td> <td class="xl30" num="1.4499999999999999E-2">1.45%</td> <td class="xl30" num="8.6899999999999991E-2">8.69%</td> <td class="xl30">N/A</td> <td class="xl29" num="1.2E-2" align="right">1.20%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=VFTSX&hl=en&meta=hl%3Den">VFTSX</a></td> <td class="xl27">Vanguard FTSE Social Index Fund</td> <td class="xl35" num="">3</td> <td class="xl30" num="-4.9699999999999994E-2">-4.97%</td> <td class="xl30" num="1.8100000000000002E-2">1.81%</td> <td class="xl30" num="6.1799999999999994E-2">6.18%</td> <td class="xl30" num="-0.13800000000000001">-13.80%</td> <td class="xl30" num="3.9699999999999999E-2">3.97%</td> <td class="xl30" num="6.6199999999999995E-2">6.62%</td> <td class="xl29" num="2.3999999999999998E-3" align="right">0.24%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=CGAEX&hl=en&meta=hl%3Den">CGAEX</a></td> <td class="xl27">Calvert Global Alternative Energy Fund</td> <td class="xl35" num="">2</td> <td class="xl30" num="-5.9500000000000004E-2">-5.95%</td> <td class="xl30" num="4.6199999999999998E-2">4.62%</td> <td class="xl30" num="0.1673">16.73%</td> <td class="xl30" num="0.22329999999999997">22.33%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29" num="1.8499999999999999E-2" align="right">1.85%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=PORTX&hl=en&meta=hl%3Den">PORTX</a></td> <td class="xl27">Portfolio 21 Fund A</td> <td class="xl35" num="">2</td> <td class="xl30" num="-1.95E-2">-1.95%</td> <td class="xl30" num="2.9500000000000002E-2">2.95%</td> <td class="xl30" num="6.0599999999999994E-2">6.06%</td> <td class="xl30" num="-4.2099999999999999E-2">-4.21%</td> <td class="xl30" num="0.1416">14.16%</td> <td class="xl30" num="0.15210000000000001">15.21%</td> <td class="xl29" num="1.4999999999999999E-2" align="right">1.50%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=SMCNX&hl=en&meta=hl%3Den">SMCNX</a></td> <td class="xl27">SAM Sustainable Climate Fund</td> <td class="xl35" num="">2</td> <td class="xl30" num="-2.6600000000000002E-2">-2.66%</td> <td class="xl30" num="5.5599999999999997E-2">5.56%</td> <td class="xl30" num="0.13300000000000001">13.30%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29">%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=CSIBX&hl=en&meta=hl%3Den">CSIBX</a></td> <td class="xl27">Calvert Social Investment Fund Bond</td> <td class="xl35" num="">1</td> <td class="xl30" num="-1.5E-3">-0.15%</td> <td class="xl30" num="-1.9E-3">-0.19%</td> <td class="xl30" num="-9.8999999999999991E-3">-0.99%</td> <td class="xl30" num="5.1200000000000002E-2">5.12%</td> <td class="xl30" num="4.0399999999999998E-2">4.04%</td> <td class="xl30" num="4.6600000000000003E-2">4.66%</td> <td class="xl29" num="1.11E-2" align="right">1.11%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=WGGFX&hl=en&meta=hl%3Den">WGGFX</a></td> <td class="xl27">Winslow Green Growth A</td> <td class="xl35" num="">0.5</td> <td class="xl30" num="-0.1699">-16.99%</td> <td class="xl30" num="6.2300000000000001E-2">6.23%</td> <td class="xl30" num="6.7500000000000004E-2">6.75%</td> <td class="xl30" num="-6.6799999999999998E-2">-6.68%</td> <td class="xl30" num="0.1242">12.42%</td> <td class="xl30" num="0.1585">15.85%</td> <td class="xl29" num="1.4500000000000001E-2" align="right">1.45%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=ARFFX&hl=en&meta=hl%3Den">ARFFX</a></td> <td class="xl27">Ariel Focus Fund</td> <td class="xl35" num="">0</td> <td class="xl30" num="6.4000000000000003E-3">0.64%</td> <td class="xl30" num="8.199999999999999E-3">0.82%</td> <td class="xl30" num="6.0499999999999998E-2">6.05%</td> <td class="xl30" num="-7.6600000000000001E-2">-7.66%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29" num="1.2500000000000001E-2" align="right">1.25%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=DUPFX&hl=en&meta=hl%3Den">DUPFX</a></td> <td class="xl27">Domini European PacAsia Social Equity A</td> <td class="xl35" num="">0</td> <td class="xl30" num="-4.8399999999999999E-2">-4.84%</td> <td class="xl30" num="8.6E-3">0.86%</td> <td class="xl30" num="4.7800000000000002E-2">4.78%</td> <td class="xl30" num="-0.10279999999999999">-10.28%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29" num="1.5800000000000002E-2" align="right">1.58%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=DEUFX&hl=en&meta=hl%3Den">DEUFX</a></td> <td class="xl27">Domini European Social Equity A</td> <td class="xl35" num="">0</td> <td class="xl30" num="-5.7800000000000004E-2">-5.78%</td> <td class="xl30" num="3.3E-3">0.33%</td> <td class="xl30" num="4.53E-2">4.53%</td> <td class="xl30" num="-0.13720000000000002">-13.72%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29" num="1.6E-2" align="right">1.60%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=DPAFX&hl=en&meta=hl%3Den">DPAFX</a></td> <td class="xl27">Domini PacAsia Social Equity A</td> <td class="xl35" num="">0</td> <td class="xl30" num="-3.4700000000000002E-2">-3.47%</td> <td class="xl30" num="-1E-3">-0.10%</td> <td class="xl30" num="4.7100000000000003E-2">4.71%</td> <td class="xl30" num="-2.1400000000000002E-2">-2.14%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29" num="1.5900000000000001E-2" align="right">1.59%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=DSEFX&hl=en&meta=hl%3Den">DSEFX</a></td> <td class="xl27">Domini Social Equity A</td> <td class="xl35" num="">0</td> <td class="xl30" num="-3.2400000000000005E-2">-3.24%</td> <td class="xl30" num="1.47E-2">1.47%</td> <td class="xl30" num="8.0500000000000002E-2">8.05%</td> <td class="xl30" num="-0.1056">-10.56%</td> <td class="xl30" num="5.0700000000000002E-2">5.07%</td> <td class="xl30" num="7.3499999999999996E-2">7.35%</td> <td class="xl29" num="1.0800000000000001E-2" align="right">1.08%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=GAAEX&hl=en&meta=hl%3Den">GAAEX</a></td> <td class="xl27">Guiness Atkinson Alternative Energy A</td> <td class="xl35" num="">0</td> <td class="xl30" num="-7.4499999999999997E-2">-7.45%</td> <td class="xl30" num="2.87E-2">2.87%</td> <td class="xl30" num="0.1351">13.51%</td> <td class="xl30" num="4.2500000000000003E-2">4.25%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29" num="1.6400000000000001E-2" align="right">1.64%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=PGRNX&hl=en&meta=hl%3Den">PGRNX</a></td> <td class="xl27">Paw World Global Green Fund</td> <td class="xl35" num="">0</td> <td class="xl30">N/A</td> <td class="xl30" num="4.4000000000000004E-2">4.40%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29">%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=PXINX&hl=en&meta=hl%3Den">PXINX</a></td> <td class="xl27">Pax World International Fund</td> <td class="xl35" num="">0</td> <td class="xl30">N/A</td> <td class="xl30" num="2.6800000000000001E-2">2.68%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29">%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" str="PXWEX " height="17"><a href="http://finance.google.com/finance?q=PXWEX&hl=en&meta=hl%3Den">PXWEX<span style=""> </span></a></td> <td class="xl27">Pax World Women's Equity A</td> <td class="xl35" num="">0</td> <td class="xl30" num="-2.41E-2">-2.41%</td> <td class="xl30" num="2.0899999999999998E-2">2.09%</td> <td class="xl30" num="6.2800000000000009E-2">6.28%</td> <td class="xl30" num="1.2199999999999999E-2">1.22%</td> <td class="xl30" num="6.3899999999999998E-2">6.39%</td> <td class="xl30" num="8.4499999999999992E-2">8.45%</td> <td class="xl29" num="1.29E-2" align="right">1.29%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=SMWNX&hl=en&meta=hl%3Den">SMWNX</a></td> <td class="xl27">SAM Sustainable Water Fund</td> <td class="xl35" num="">0</td> <td class="xl30" num="-1.11E-2">-1.11%</td> <td class="xl30" num="4.4800000000000006E-2">4.48%</td> <td class="xl30" num="6.9900000000000004E-2">6.99%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29">%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=WGSLX&hl=en&meta=hl%3Den">WGSLX</a></td> <td class="xl27">Winslow Green Solutions A</td> <td class="xl35" num="">0</td> <td class="xl30" num="-8.8800000000000004E-2">-8.88%</td> <td class="xl30" num="3.8100000000000002E-2">3.81%</td> <td class="xl30" num="8.6599999999999996E-2">8.66%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29" num="1.4500000000000001E-2" align="right">1.45%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=MPIAX&hl=en&meta=hl%3Den">MPIAX</a></td> <td class="xl27">MMA Praxis International Fund</td> <td class="xl35" num="">-1</td> <td class="xl30" num="-4.3400000000000001E-2">-4.34%</td> <td class="xl30" num="1.37E-2">1.37%</td> <td class="xl30" num="5.1299999999999998E-2">5.13%</td> <td class="xl30" num="-1.1200000000000002E-2">-1.12%</td> <td class="xl30" num="0.14380000000000001">14.38%</td> <td class="xl30" num="0.15789999999999998">15.79%</td> <td class="xl29" num="1.72E-2" align="right">1.72%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=GCBLX&hl=en&meta=hl%3Den">GCBLX</a></td> <td class="xl27">Green Century Balanced Fund</td> <td class="xl35" num="">-1</td> <td class="xl30" num="-4.0500000000000001E-2">-4.05%</td> <td class="xl30" num="9.300000000000001E-3">0.93%</td> <td class="xl30" num="2.7300000000000001E-2">2.73%</td> <td class="xl30" num="-5.1399999999999994E-2">-5.14%</td> <td class="xl30" num="4.5999999999999999E-2">4.60%</td> <td class="xl30" num="8.1099999999999992E-2">8.11%</td> <td class="xl29" num="1.44E-2" align="right">1.44%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=GCEQX&hl=en&meta=hl%3Den">GCEQX</a></td> <td class="xl27">Green Century Equity Fund</td> <td class="xl35" num="">-1</td> <td class="xl30" num="-4.6399999999999997E-2">-4.64%</td> <td class="xl30" num="1.5700000000000002E-2">1.57%</td> <td class="xl30" num="5.8700000000000002E-2">5.87%</td> <td class="xl30" num="-8.6800000000000002E-2">-8.68%</td> <td class="xl30" num="4.7300000000000002E-2">4.73%</td> <td class="xl30" num="6.93E-2">6.93%</td> <td class="xl29" num="9.4999999999999998E-3" align="right">0.95%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=CSXAX&hl=en&meta=hl%3Den">CSXAX</a></td> <td class="xl27">Calvert Social Index Fund</td> <td class="xl35" num="">-2</td> <td class="xl30" num="-5.1699999999999996E-2">-5.17%</td> <td class="xl30" num="1.49E-2">1.49%</td> <td class="xl30" num="5.9400000000000001E-2">5.94%</td> <td class="xl30" num="-9.1300000000000006E-2">-9.13%</td> <td class="xl30" num="4.87E-2">4.87%</td> <td class="xl30" num="6.8900000000000003E-2">6.89%</td> <td class="xl29" num="7.4999999999999997E-3" align="right">0.75%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=CSIEX&hl=en&meta=hl%3Den">CSIEX</a></td> <td class="xl27">Calvert Social Investment Fund Equity</td> <td class="xl35" num="">-2</td> <td class="xl30" num="-9.300000000000001E-3">-0.93%</td> <td class="xl30" num="2.3799999999999998E-2">2.38%</td> <td class="xl30" num="7.7199999999999991E-2">7.72%</td> <td class="xl30" num="2.7699999999999999E-2">2.77%</td> <td class="xl30" num="7.7899999999999997E-2">7.79%</td> <td class="xl30" num="8.5099999999999995E-2">8.51%</td> <td class="xl29" num="1.21E-2" align="right">1.21%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=CWVGX&hl=en&meta=hl%3Den">CWVGX</a></td> <td class="xl27">Calvert World Values International Equity Fund</td> <td class="xl35" num="">-2</td> <td class="xl30" num="-1.6200000000000003E-2">-1.62%</td> <td class="xl30" num="1.8600000000000002E-2">1.86%</td> <td class="xl30" num="8.5000000000000006E-2">8.50%</td> <td class="xl30" num="-8.2400000000000001E-2">-8.24%</td> <td class="xl30" num="0.1361">13.61%</td> <td class="xl30" num="0.1515">15.15%</td> <td class="xl29" num="1.6E-2" align="right">1.60%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=MYPVX&hl=en&meta=hl%3Den">MYPVX</a></td> <td class="xl27">Citizen's Sustainable Core Opprotunity Fund</td> <td class="xl35" num="">-2</td> <td class="xl30" num="-7.22E-2">-7.22%</td> <td class="xl30" num="1.6899999999999998E-2">1.69%</td> <td class="xl30" num="3.27E-2">3.27%</td> <td class="xl30" num="-0.10039999999999999">-10.04%</td> <td class="xl30" num="6.9500000000000006E-2">6.95%</td> <td class="xl30" num="0.1016">10.16%</td> <td class="xl29" num="1.29E-2" align="right">1.29%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=CSIFX&hl=en&meta=hl%3Den">CSIFX</a></td> <td class="xl27">Calvert Social Investment Fund Balanced</td> <td class="xl35" num="">-3</td> <td class="xl30" num="-2.29E-2">-2.29%</td> <td class="xl30" num="1.0700000000000001E-2">1.07%</td> <td class="xl30" num="2.8900000000000002E-2">2.89%</td> <td class="xl30" num="-3.6499999999999998E-2">-3.65%</td> <td class="xl30" num="4.4900000000000002E-2">4.49%</td> <td class="xl30" num="6.2199999999999998E-2">6.22%</td> <td class="xl29" num="1.1900000000000001E-2" align="right">1.19%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=CAAPX&hl=en&meta=hl%3Den">CAAPX</a></td> <td class="xl27">Ariel Appreciation Fund</td> <td class="xl35" num="">-3</td> <td class="xl30" num="-3.6000000000000004E-2">-3.60%</td> <td class="xl30" num="1.9400000000000001E-2">1.94%</td> <td class="xl30" num="4.6600000000000003E-2">4.66%</td> <td class="xl30" num="-0.14829999999999999">-14.83%</td> <td class="xl30" num="3.4000000000000002E-2">3.40%</td> <td class="xl30" num="7.9100000000000004E-2">7.91%</td> <td class="xl29" num="1.12E-2" align="right">1.12%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=DSBFX&hl=en&meta=hl%3Den">DSBFX</a></td> <td class="xl27">Domini Social Bond Fund</td> <td class="xl35" num="">-4</td> <td class="xl30" num="7.6E-3">0.76%</td> <td class="xl30" num="-6.9999999999999993E-3">-0.70%</td> <td class="xl30" num="-1.77E-2">-1.77%</td> <td class="xl30" num="5.8099999999999999E-2">5.81%</td> <td class="xl30" num="3.4200000000000001E-2">3.42%</td> <td class="xl30" num="2.6600000000000002E-2">2.66%</td> <td class="xl29" num="9.4999999999999998E-3" align="right">0.95%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=SCFSX&hl=en&meta=hl%3Den">SCFSX</a></td> <td class="xl27">Sierra Club Stock Fund</td> <td class="xl35" num="">-4</td> <td class="xl30" num="-4.7500000000000001E-2">-4.75%</td> <td class="xl30" num="1.8799999999999997E-2">1.88%</td> <td class="xl30" num="4.6399999999999997E-2">4.64%</td> <td class="xl30" num="-0.12920000000000001">-12.92%</td> <td class="xl30" num="3.1699999999999999E-2">3.17%</td> <td class="xl30" num="6.7099999999999993E-2">6.71%</td> <td class="xl29" num="1.26E-2" align="right">1.26%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" str="BCIIX " height="17"><a href="http://finance.google.com/finance?q=BCIIX&hl=en&meta=hl%3Den">BCIIX<span style=""> </span></a></td> <td class="xl27">Brown Capital Management International Inst</td> <td class="xl35" num="">-5</td> <td class="xl30" num="-0.10060000000000001">-10.06%</td> <td class="xl30" num="1.6000000000000001E-3">0.16%</td> <td class="xl30" num="-8.0000000000000004E-4">-0.08%</td> <td class="xl30" num="-0.10619999999999999">-10.62%</td> <td class="xl30" num="0.11960000000000001">11.96%</td> <td class="xl30" num="0.1618">16.18%</td> <td class="xl29" num="0.02" align="right">2.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=CMIFX&hl=en&meta=hl%3Den">CMIFX</a></td> <td class="xl27">Calvert Social Investment Fund Enhanced</td> <td class="xl35" num="">-5</td> <td class="xl30" num="-3.1400000000000004E-2">-3.14%</td> <td class="xl30" num="1.7600000000000001E-2">1.76%</td> <td class="xl30" num="5.8499999999999996E-2">5.85%</td> <td class="xl30" num="-0.1051">-10.51%</td> <td class="xl30" num="4.3799999999999999E-2">4.38%</td> <td class="xl30" num="6.9099999999999995E-2">6.91%</td> <td class="xl29" num="1.2E-2" align="right">1.20%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=CRATX&hl=en&meta=hl%3Den">CRATX</a></td> <td class="xl27">CRA Qualified Investment Retail (CRAIX)</td> <td class="xl35" num="">-5</td> <td class="xl30" num="2.5999999999999999E-3">0.26%</td> <td class="xl30" num="-7.8000000000000005E-3">-0.78%</td> <td class="xl30" num="-1.11E-2">-1.11%</td> <td class="xl30" num="5.0599999999999999E-2">5.06%</td> <td class="xl30">N/A</td> <td class="xl30">N/A</td> <td class="xl29" num="0.01" align="right">1.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=WAEGX&hl=en&meta=hl%3Den">WAEGX</a></td> <td class="xl27">Citizen's Emerging Growth Standard</td> <td class="xl35" num="">-8</td> <td class="xl30" num="-4.58E-2">-4.58%</td> <td class="xl30" num="2.8999999999999998E-2">2.90%</td> <td class="xl30" num="6.6799999999999998E-2">6.68%</td> <td class="xl30" num="-5.9400000000000001E-2">-5.94%</td> <td class="xl30" num="8.3299999999999999E-2">8.33%</td> <td class="xl30" num="0.1045">10.45%</td> <td class="xl29" num="1.8800000000000001E-2" align="right">1.88%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl37" style="height: 12.75pt;" height="17"><a href="http://finance.google.com/finance?q=ARGFX&hl=en&meta=hl%3Den">ARGFX</a></td> <td class="xl27">Ariel Fund</td> <td class="xl35" num="">-9</td> <td class="xl30" num="-8.4700000000000011E-2">-8.47%</td> <td class="xl30" num="1.3100000000000001E-2">1.31%</td> <td class="xl30" num="8.3000000000000001E-3">0.83%</td> <td class="xl30" num="-0.2024">-20.24%</td> <td class="xl30" num="2.0000000000000001E-4">0.02%</td> <td class="xl30" num="7.8799999999999995E-2">7.88%</td> <td class="xl29" num="1.03E-2" align="right">1.03%</td> </tr> </tbody></table><br />And this quarter's top scorers in the Smug Asset Categories are:<br /><br /><table str="" style="border-collapse: collapse; width: 518pt;" border="0" cellpadding="0" cellspacing="0" width="690"><col style="width: 83pt;" width="110"> <col style="width: 72pt;" width="96"> <col style="width: 56pt;" width="75"> <col style="width: 62pt;" width="82"> <col style="width: 245pt;" width="327"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl27" style="height: 12.75pt; width: 83pt;" height="17" width="110">Category</td> <td class="xl24" style="width: 72pt;" width="96">YTD Ret</td> <td class="xl27" style="width: 56pt; text-align: center;" width="75">Ave Score</td> <td class="xl24" style="width: 62pt;" width="82">Best Bet</td> <td class="xl27" style="width: 245pt;" width="327">Name</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Agriculture</td> <td class="xl25" num="0">0.00%</td> <td class="xl26" num="0">0.00 </td> <td class="xl28" str=""><br /></td> <td str=""><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Bond</td> <td class="xl25" num="6.3499999999999997E-3">0.64%</td> <td class="xl26" num="1">1.00 </td> <td class="xl28">PAXHX</td> <td>Pax World High Yield A</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Diversity</td> <td class="xl25" num="-2.41E-2">-2.41%</td> <td class="xl26" num="0">0.00 </td> <td class="xl28" str="PXWEX ">PXWEX<span style=""> </span></td> <td>Pax World Women's Equity A</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Eco Reserve</td> <td class="xl25" num="0">0.00%</td> <td class="xl26" num="0">0.00 </td> <td class="xl28" str=""><br /></td> <td str=""><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Energy</td> <td class="xl25" num="-6.7000000000000004E-2">-6.70%</td> <td class="xl26" num="1">1.00 </td> <td class="xl28">CGAEX</td> <td>Calvert Global Alternative Energy Fund</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Low Carbon</td> <td class="xl25" num="0">0.00%</td> <td class="xl26" num="0">0.00 </td> <td class="xl28" str=""><br /></td> <td str=""><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Real Estate</td> <td class="xl25" num="0">0.00%</td> <td class="xl26" num="0">0.00 </td> <td class="xl28" str=""><br /></td> <td str=""><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Recycle</td> <td class="xl25" num="-8.8800000000000004E-2">-8.88%</td> <td class="xl26" num="0">0.00 </td> <td class="xl28">WGSLX</td> <td>Winslow Green Solutions A</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Social</td> <td class="xl25" num="-3.8663999999999997E-2">-3.87%</td> <td class="xl26" num="-1.18">(1.18)</td> <td class="xl28">TICRX</td> <td>TIAA CREF Social Choice Equity</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Technology</td> <td class="xl25" num="0">0.00%</td> <td class="xl26" num="0">0.00 </td> <td class="xl28" str=""><br /></td> <td str=""><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Total Green</td> <td class="xl25" num="-6.2E-2">-6.20%</td> <td class="xl26" num="2.7">2.70 </td> <td class="xl28" str="NALFX ">NALFX<span style=""> </span></td> <td>New Alternatives Fund A</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Water</td> <td class="xl25" num="-1.11E-2">-1.11%</td> <td class="xl26" num="0">0.00 </td> <td class="xl28">SMWNX</td> <td>SAM Sustainable Water Fund</td> </tr> </tbody></table><br />Obviously, it's been a tough year, mostly recently. That's why asset allocation matters (see our previous posts <a href="http://smuginvestments.blogspot.com/2008/07/etfs-for-complete-green-portfolio.html">here</a>, <a href="http://seekingalpha.com/article/83720-green-commodities-for-a-complete-green-portfolio?source=wl_sidebar">here</a>, and <a href="http://smuginvestments.blogspot.com/2008/07/risk-and-green-investing.html">here</a>).<br /><br />Note that this information is culled from various third party sources and we cannot vouch for its accuracy. Also note that the scoring system is a Smug model and subject to change in future posts.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-77969148453497614782008-07-09T10:12:00.000-04:002008-07-09T10:47:42.008-04:00Risk and Green InvestingMy father in law just sent me <a href="http://www.nytimes.com/2008/06/22/business/22view.html?_r=1&oref=slogin">an excellent op-ed piece written by Peter L. Bernstein in the New York Times</a> (Sunday June 22nd paper) that got me thinking about risk. I've talked a bit about risk in creating your portfolio, and I've beaten to death already the fact that <span style="font-weight: bold;">I am risk averse</span>, but I think given current market conditions, it's not a bad idea to rehash the concept.<br /><br />First and foremost, it's important to define what risk is exactly. Despite there being hundreds, if not thousands, of measures of volatility, the article points out that the market tends to muddle the definitions of risk and volatility. In short, <span style="font-weight: bold;">volatility is NOT risk</span>. Risk is the likelihood that something will happen (anything, really). Volatility in financial markets is usually a <span style="font-weight: bold;">reaction to the perception</span> that something will happen (just about anything). When working to manage risk, it's a twofold process: 1.) you need to treat the symptom (volatility), and 2.) understand "the consequences of being wrong" [Bernstein].<br /><br /><span style="font-style: italic;">So what does that mean for your portfolio, and what does that mean for green investing in general?</span><br /><br /><span style="font-weight: bold;">Step 1: Treating the Symptom</span><br /><br />Hedge funds and portfolio managers big and small have a multitude of tools, one of the primary being <a href="http://finance.yahoo.com/q?s=%5EVIX">the VIX</a>, the CBOE index tracking implied volatility of the S&P 500 thirty days in the future. As the VIX rises, it indicates speculators percieve increasing volatility in the S&P 500's returns in the next 30 days (it's more complicated than that, but that's the gist - see <a href="http://en.wikipedia.org/wiki/VIX">this</a> for more). Other favorites include the <a href="http://www.conference-board.org/economics/ConsumerConfidence.cfm">Consumer Confidence Index</a>, and the easiest, plain old <a href="http://www.investopedia.com/terms/s/standarddeviation.asp">standard deviation</a>. With all these tools at our disposal, it's still almost impossible to predict actual volatility. But at least there are easy ways to lower it.<br /><br />To lower volatility, the simplest solution is to invest in less volatile assets. For instance, high volatility periods often see a movement from common stock to bonds as people get nervous. This can tend to inflate bond prices in the short term, but volatility in bonds tends to be lower than in common stock, so the concept works. It's important to note that your return may suffer, but that often is the cost of fear. In the world of green investing, this would mean moving from something with high volatility (and often a chance at higher returns) like <span style="font-weight: bold;">Renewable Energy</span> (like <a href="http://smuginvestments.blogspot.com/2008/06/changing-tact.html">this</a> for example) to lower volatility investments like <span style="font-weight: bold;">Socially Responsible Bonds</span> (like <a href="http://smuginvestments.blogspot.com/2008/06/local-vs-green-cage-match.html">this</a> for example). What's better than removing volatility? Removing volatility without sacraficing returns. That's what non correlated diversification is meant to do, and why it's the cornerstone to modern portfolio theory - <span style="font-weight: bold;">invest in multiple non correlated asset types to increase returns and lower volatility</span>. For green investing, <a href="http://smuginvestments.blogspot.com/2008/07/etfs-for-complete-green-portfolio.html">we've made it simple and done the work for you</a> (if you want more detail, don't hesitate to give us an email or call, or keep reading as it comes out).<br /><br /><span style="font-weight: bold;">Step 2: Understand the Consequences</span><br /><br />Understanding the consequence of an investment is absolutely necessary for any informed investor. At the risk of proselytizing, informed investing can mean the difference of thousands, if not tens or hundreds of thousands, of dollars. Most retail and institutional investors don't have the time, expertise, or desire to fully research their investments. This is why investment professionals exist. And even though I think most investment professionals are concerned with their own bottom lines, I believe that the free exchange of information is absolutely necessary in understanding the consequences of an investment. In ther end, a well informed decision is the key to any strong investment portfolio, as well as risk management. To that end, unless you manage your own portfolio, <span style="font-weight: bold;">find someone you can trust</span>. I said it before in my <a href="http://seekingalpha.com/article/83074-a-beginners-guide-to-green-investing?source=commenter">Beginner's Guide to Green Investing</a>, but investment professionals are there for a reason (<a href="http://www.smuginvestments.com/">myself included</a>).<br /><br />The second part falls on you: decide how much risk you are willing to take, and what consequences you can live with. My former mentor said it best: "<span style="font-weight: bold;">Why take more risk than you need to get where you're going?</span>" It's an excellent philosophy in general, and it gets to the heart of the issue: your comfort level. The best risk management is not to take any more risk than you can afford, or if you do, never go outside your comfort zone.<br /><br /><span style="font-weight: bold;">Green Investing and Risk Management</span><br /><br />In many ways, Mr. Bernstein makes a compelling argument for green and social investing. I believe green investing and socially responsible investing fundamentally address mitigating risk by understanding the consequence of investment. <a href="http://smuginvestments.blogspot.com/2008/06/when-is-it-green-enough-green-investor.html">I'm not one to trust what I'm told</a> even with responsible investments, but investing in a sustainable way in responsible companies avoids many foreseeable consequences like subprime meltdowns or Enron debacles. That green and socially responsible investments often have some measure at least of social risk management built in works in its favor.<br /><br />In practical terms, a simple socially responsible screen (the standards are tobacco and firearms screens) avoids some measure of litigation risk, as these industries tend to be highly litigious in nature. Litigation leeches profits and creates unnecessary strain on cash flows. It can also lead to unethical behavior internally or public outcry externally, both of which generally have negative consequences in the long term. Green investments often employ more stringent corporate standards (the "reap what you sow" effect), but even the very nature of their products tend to err on the responsibility. Environmental consequences are often intangible and difficult to ascribe values, however the writers at <a href="http://www.env-econ.net/">Environmental Economics</a> do an awesome job at breaking it down. The truth is, change to environmental policy in this country has taken so long in part due to our indifference when there is no clear pricetag attached. Even if the negative consequence avoided is somewhat intangible, it is still avoided just the same. That said, there are a number of risks avoided when comparing non renewable energy to renewable energy. For instance, coal plants are forced to comply with government regulations for pollution output (though enforcement has been virtually non existent for the better part of this decade). This places a burden on the coal companies to either pay fines or install equipment, both of which come at cost to the investors in the long run. A wind turbine farm, on the other hand, faces far fewer regulation due to its exponentially less pollutants, and can profit where coal can't.<br /><br />Whereas Step 2 is in many ways built in for green investors, Step 1 (volatility) is most definitely not. This is where investment professionals can be most helpful, but as a good starting point, see <a href="http://smuginvestments.blogspot.com/2008/07/etfs-for-complete-green-portfolio.html">our last piece on asset allocation</a> within green investing. And watch out for more as we continue with the Smug take on reducing green volatility.<br /><br />For those of you looking for more personalized help, please feel free to <a href="http://www.smuginvestments.com/">email or call us</a>. The advice is free, and I welcome the conversation. So be green and invest Smug!Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-18268796220860685052008-07-08T15:24:00.003-04:002008-07-17T13:57:21.753-04:00Quck LinksCheck these out, some interesting tidbits:<br /><br />Ode Magazine details some <a href="http://www.odemagazine.com/exchange/2353/green_401_k_plans">Green 401(k) info.</a><br /><br />The Motley Fool notes that over <a href="http://www.fool.com/investing/value/2008/07/07/give-green-investing-the-green-light.aspx">10% of all investable assets were invested using socially responsible criteria.</a><br /><br />Interest in green investing spurred a <a href="http://www.semiconductor.net/articleXml/LN818638782.html">58% increase in green venture capital money in the 2Q.</a><br /><br />More to come!Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-9085605621865754822008-07-06T11:25:00.000-04:002008-07-06T11:25:01.035-04:00ETFs for a Complete Green PortfolioI just recently published an <a href="http://seekingalpha.com/article/83720-green-commodities-for-a-complete-green-portfolio?source=wl_sidebar">article</a> for the most excellent<span style="font-weight: bold;"> <a href="http://seekingalpha.com/">Seeking Alpha</a></span>, a contributor ezine for the consumate DIYers, (read the article <a href="http://seekingalpha.com/article/83720-green-commodities-for-a-complete-green-portfolio?source=wl_sidebar">here</a>), and I wanted to follow up for my Smug readers with some more in depth analysis. The gist of the article deals with what I think the key to green investing (and investing in general) is: asset allocation. I spent the last three years in alternative investments (hedge funds, non traded REITs, limited partnerships, etc.), which, for the most part, are accredited investors only. The number one takeaway from my alternative experience was <span style="font-weight: bold;">investing outside the box matters</span>. The 60/40 stock/bond portfolio of yesteryear is so anachronistic, we at Smug practice post modern investing - we fashion ourselves as sort of the hipster punks of the investment world. Take one look at the <a href="http://www.yale.edu/investments/Yale_Endowment_07.pdf">Yale endowment fund</a> (PDF file) and you'll realize what the smartest of the smart have known for a long time - <span style="font-weight: bold;">the name of the game is correlation and risk</span>. They only have a measly 7% in domestic equity! Forget the narrow view that the NYSE is the only player in the game, there is much more to your overall portfolio than that, green or otherwise. ETFs and ETNs have started to catch up and allow <span style="font-weight: bold;">everyone</span>, not just the super rich, in on the game.<br /><br />As a green investor, the challenge is creating a <span style="font-weight: bold;">total green portfolio</span>. Now, this is still a bit of a dream, but if we stretch enough, it's not so crazy. How can we make a complete green portfolio? Here are some suggestions:<br /><br /><span style="font-weight: bold;">1.) Commodities are the base of your portfolio</span>. There is a lot of "bubble" type press about commodities now, that commodities are overpriced. The Smug philosophy suggests otherwise. What has more worth: a resource that people need to live that is physical, or intangible stock in ANY company? For the green investor, this means <span style="font-weight: bold;">water, waste</span> and <span style="font-weight: bold;">agriculture</span>. Yes, we view waste as commodity. These are things that people can neither live without, nor can they help create it.<br /><br /><span style="font-weight: bold;">2.) Invest globally on a macro scale</span>. This seems sort of contradictory, since investing locally is more important to sustainability than investing globally. That said, global index and currency investments, <span style="font-weight: bold;">especially emerging markets</span> that have <a href="http://smuginvestments.blogspot.com/2008/05/biocapacity-consuming-like-american.html">eco reserve and low carbon output</a>, offer low correlation returns and aren't depending on "traditional" investment theory.<br /><br /><span style="font-weight: bold;">3.) Real estate can be your friend</span>. While green real estate is hard to come by, it does exists in small ways, especially if you're willing to do a tidbit of soul swallowing. The traded REIT and asset manager sphere has a few green players, but I'm very excited about some new <a href="http://www.greenbuildingsnyc.com/2008/02/06/green-realty-trust-nation%E2%80%99s-first-green-reit-is-on-the-horizon/"><span style="font-weight: bold;">non-traded green REITs</span></a> that are worth watching. Real estate, especially the non traded vareity, adds a level of mental cool to the portfolio, and tend to offer fairly steady income yields. Don't be afraid of "subprime" in the commercial real estate realm (yet), real estate is essentially a commodity in limited supply and always has value in the long (sometimes very long) run.<br /><br /><span style="font-weight: bold;">4.) Don't invest in your father's bonds</span>. Bonds have come a long way, and as we've detailed <a href="http://smuginvestments.blogspot.com/2008/06/not-quite-green-income.html">here</a> and <a href="http://smuginvestments.blogspot.com/2008/06/local-vs-green-cage-match.html">here</a>, they can offer more low correlation returns in sustainable, responsible ways. I'm still waiting with bated breath for some green energy preferred shares - if anyone knows of any, please let me know, I'd love to incorporate them.<br /><br /><span style="font-weight: bold;">5.) Green energy and socially responsible funds are just pieces</span>. They tend to be highly correlated to traditional S&P and NASDAQ type stocks, so don't overdo it. That said, no green portfolio is complete without green energy and technology. There are new great opportunities to watch with ETFs coming out almost daily, the new wind ETF (<a href="http://finance.google.com/finance?q=fan&hl=en">FAN</a>), solar ETF (<a href="http://finance.google.com/finance?q=tan&hl=en&meta=hl%3Den">TAN</a>), and carbon ETF (<a href="http://finance.google.com/finance?q=grn&hl=en&meta=hl%3Den">GRN</a>), not to mention the mutual funds and ETFs Smug's already detailed (<a href="http://smuginvestments.blogspot.com/2008/06/changing-tact.html">here</a> and <a href="http://seekingalpha.com/article/83074-a-beginners-guide-to-green-investing?source=mb">here</a>).<br /><br /><span style="font-weight: bold;">6.) The most important thing: BE PATIENT</span>. Creating a long term portfolio takes time and effort, but pays off. When the market bips and jumps and skitters, don't rush for the exits. It's important to keep your head, <span style="font-weight: bold;">create a timeline</span>, and be mindful that investing is a long term thing. Even <a href="http://en.wikipedia.org/wiki/Gordon_Gekko">Gordon Gekko</a>, the henchman of corporate greed, said, "Don't get emotional about investing." That's true even in green investing - being responsible, sustainable, and green is <span style="font-weight: bold;">smart </span>investing, <span style="font-weight: bold;">not emotional</span> investing.<br /><br />Not enough? How about we introduce the <span style="font-weight: bold;">Smug Total Green General Portfolio</span>:<br /><br /><table str="" style="border-collapse: collapse; width: 204pt;" border="0" cellpadding="0" cellspacing="0" width="272"><col style="width: 156pt;" width="208"> <col style="width: 48pt;" width="64"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt; width: 156pt; text-align: center; font-weight: bold;" height="17" width="208">Asset Category</td> <td class="xl24" style="width: 48pt; text-align: center; font-weight: bold;" width="64">%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Agriculture</td> <td class="xl25" num="0.125">15.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Bond</td> <td class="xl25" num="0.15">12.50%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Eco Reserve / Low Carbon</td> <td class="xl25" num="0.15">15.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Energy / Technology</td> <td class="xl25" num="0.15">20.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Real Estate</td> <td class="xl25" num="7.4999999999999997E-2">5.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Social / Diversity</td> <td class="xl25" num="0.15">10.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Waste / Recycling</td> <td class="xl25" num="0.1">10.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Water</td> <td class="xl25" num="0.1">12.50%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><br /></td> <td class="xl26"><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl24" style="height: 12.75pt; font-weight: bold; text-align: center;" height="17">Portfolio Total:</td> <td style="font-weight: bold;" class="xl27" num="1" fmla="=SUM(B2:B10)">100.00%</td> </tr> </tbody></table><br />This should provide a good baseline for an average investor, though it by no means suggests it fits your individual profile. Please contact your financial adviser, or <a href="http://www.smuginvestments.com/"><span style="font-weight: bold;">call me directly</span></a>, if you're looking for specific advice pertaining to your situation. And as always, read the disclaimer to the right about reading the prospectus first.<br /><br />Be smug, invest green.<br /><p class="MsoNormal"><span style=";font-family:Verdana;font-size:11;" ><o:p></o:p></span></p>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-32990936963122134932008-07-02T13:32:00.001-04:002008-07-02T13:32:01.093-04:00Smug Profile: Easy Green Livin'Most people wake up in the morning, eat breakfast, brush their teeth, and take a train to work. They sit in a cubicle or an office under flourescent lights, printing report after report, drinking lattes and praying for 5 o'clock. After a trainride home or commute in the car, you get home and blast the AC in the summer heat, take out the trash, heat up microwave dinner, watch TV, and go to sleep.<br /><br />When you think about it, that's a <span style="font-weight: bold;">lot</span> of opportunity for green. There's also a lot of room to become an emo kid and decry life, but that's not for us to say really. Think about it: imagine that every time you flush the toilet, you own the company that treats and cleans that water. Imagine as you're sitting underneath compact flourescent bulbs that light your cubicle, you own a piece of the company making that bulb. Imagine when you take out the trash, you own the company that recycles the contents.<br /><br />It's surprising with all the talk about green in the media, there is very little mention of one of the most central green industries: <span style="font-weight: bold;">your life</span>. In the long term, sustainable living solutions make perfect sense in a green portfolio. From water recycling to waste recycling to green transportation, the things we do every day are equally as important (if not more so) than the bigger picture items like energy. If you're a DIYer, watch for future posts about individual ETFs to make your own green living component. Fortunately, <a href="http://www.winslowgreen.com/home/default.aspx">Winslow Management</a> has already done the hard work for the retail investors looking for a quick stop solution, the <a href="http://www.winslowgreen.com/fund2/default.aspx">Winslow Green Solutions Fund</a>:<br /><br />Ticker: <a href="http://finance.google.com/finance?client=ig&q=WGSLX">WGSLX</a><br /><p>Inception: November 1, 2007<br />Asset Type: Mutual Fund<br />Markets: Global<br />Smug Category: <span style="font-weight: bold;">Total Green</span><br />Included in Smug Asset Pool?: Yes<br />Returns:</p><p>YTD -14.42% </p>Min Investment: $2,500<br />Min Retirement Investment: $2,000<br />Minimum Additional: $50<br /><br />Sales Load:<br />$2,500 to $24,999.99: 0.00% of offering price<br />$25,000 to $99,999.99: 0.00% of offering price<br />$100,000 or more: 0.00% of offering price<br /><br />Management Fees: 0.90% for 2007<br />12b-1 Fees: 0.00%<br />Other fees: 1.00%<br />Redemption Fee: 2.00% (<90 day hold)<br />Total Annual Fee: 1.90% (actual fee capped at 1.45% until 2009)<br /><br /><br />Let's get the bad out of the way first: WGSLX is a <span style="font-weight: bold;">young fund</span>, so consider yourself warned. It's already down almost 15% YTD, but that's not a good reason not to feel good about the long term. Lastly, and most egregiously, is the annual fee of 1.45%, which is higher than I like. Worse per perspectus the fee has been capped at 1.45% until April 2009, which means the startup costs are high and you're getting it at a premium.<br /><br />With the bad out of the way, let's get to the good. Winslow is another long running company in the style of NALFX, trading their first fund, WGGFX, privately since 1994 and publicly since 2001. They have a history of great performance, with annualized 10 year numbers for WGGFX over 13%. So there is reason to believe the same management team that's been analyzing green for so long will be capable of performing in the new fund (note: past performance not indicative of future results... ha!). More importantly, the industry is an <span style="font-weight: bold;">excellent</span> long term prospect. Winslow has stricter controls than many green funds in terms of narrowing its asset pool, and that works to their advantage as it focuses on companies with a real long term commitment to sustainability. Also, if you look at their <a href="http://www.winslowgreen.com/fund2/totalportfolio.aspx">portfolio holdings</a>, it's clear they are positioning themselves to invest in <span style="font-weight: bold;">everyone</span>, not just obvious green investments.<br /><br />So feel smug and give it a look. As always, see my disclaimer to the right of the page.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-24817063680352737872008-07-01T13:27:00.003-04:002008-07-01T13:37:59.106-04:00Smug News and Question of the DayI've just returned from a meeting with a great firm who deals primarily with financial and estate planning in which we decided to move my licenses over to their office so I can begin offering green investments (and other alternative investments) to accredited and non accredited investors alike. It's exciting for me to join them (<a href="http://www.capitalanalystsne.com/index.cfm">Capital Analysts of New England,</a> excellent <a href="http://www.capitalanalysts.com">broker dealer</a> and excellent firm alike), but it got me wondering.<br /><br />As we went over the details of bringing in new clients, it occurred to them that most of their current reps and clients would be disinterested in green investing, and only slightly interested in alternatives like REITs and hedge funds. The establishment seems to be pretty firmly entrenched in the "gentleman's portfolio" of 60% stock and 40% bonds in their investable assets.<br /><br />It's clear that even as I wax poetic about green investing, why you should do it, and why it makes sense, the old guard of antipathy or just plain anti-green investors could really care less. Not to generalize, but it tends to be an older crowd with accrued wealth, tends to be white, and tends to be male. <br /><br />So the question of the day is: <span style="font-weight: bold;">why</span>? Why not invest green? Is it volatility? Is it that there is a feeling that global warming is a myth? Or is it perceived as just another tech boom waiting for that bubble to pop? And if you don't invest green, what <span style="font-weight: bold;">do</span> you invest in?<br /><br />Smug thoughts of the day.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-91527274945072845792008-06-26T13:54:00.001-04:002008-06-26T13:59:17.240-04:00Smug Portfolio : January AllocationsThe hedge fund model which makes use of the assets and methodology that is the subject of this blog runs as two versions: the active, hedge fund version, and the passive Assets Under Management version. The hedge fund version is for <a href="http://en.wikipedia.org/wiki/Accredited_investor">accredited</a> investors only, and uses <a href="http://en.wikipedia.org/wiki/Active_management">active management</a> based off a fairly complex trading model I created over the last 2 years. The active model attempts to capture maximum upside while limited volatility and risk. The fees are higher in the active model (but not much), and the historical results (which don't guarantee future performance) is more stable.<br /><br />The "<a href="http://en.wikipedia.org/wiki/Passive_management">passive</a>" management model used for individual investor accounts allows non-accreds (less than $1M net worth) - basically, me and everyone I know - to invest in a balanced green portfolio. While it's more volatile than active management, it should act as a way for normal people (aka, everyone) to invest green, get some measure of active management at a minimum of cost, and feel smug. In an effort to be open source about green investing, I will list the passive management positions on a quarterly or biannual basis. See below, with allocations. Note that <span style="font-weight: bold;">the allocations listed below are for educational purposes - they are not recommended for everyone, and are based on dated model generated information.</span><br /><br /><span style="font-weight: bold;">Passive Positions as of January 1, 2008</span><br /><br /><a href="http://finance.google.com/finance?q=MUTF:CRATX">CRATX</a> CRA Qualified Investment Retail (CRAIX) 11.64%<br /><a href="http://finance.google.com/finance?q=AMEX:DBA">DBA</a> DB Agricuture ETF 8.79%<br /><a href="http://finance.google.com/finance?q=MUTF:DSBFX">DSBFX</a> Domini Social Bond Fund 12.10%<br /><a href="http://finance.google.com/finance?q=NYSE:EWM">EWM</a> iShares MSCI Malaysia Index ETF 7.61%<br /><a href="http://finance.google.com/finance?q=NYSE:FXC">FXC</a> CurrencyShares Canadian Dollar Trust ETF 9.29%<br /><a href="http://finance.google.com/finance?q=NYSE:FXS">FXS</a> CurrencyShares Swedish Krona Trust ETF 9.78%<br /><a href="http://finance.google.com/finance?q=MUTF:PAXHX">PAXHX</a> Pax World High Yield A 16.77%<br /><a href="http://finance.google.com/finance?q=NASDAQ:QCLN">QCLN</a> First Trust NASDAQ Clean Edge ETF 7.49%<br /><a href="http://finance.google.com/finance?q=AMEX:SH">SH</a> ProShares Short S&P 500 ETF 7.60%<br /><a href="http://finance.google.com/finance?q=udn&hl=en&meta=hl%3Den">UDN</a> PowerShares DB USD Index Bearish ETF 8.93%<br /><br />These allocations have changed, but notice the nice mix of community investments (CRATX), commodities (Agriculture, Currencies), short positions (SH, UDN), and green/SRI. This is based on the Smug Passive model dated 6/23/08 3:25PM.<br /><br />For more detailed look at two of the funds listed above, see Smug posts <a href="http://smuginvestments.blogspot.com/2008/06/local-vs-green-cage-match.html">here</a> and <a href="http://smuginvestments.blogspot.com/2008/06/not-quite-green-income.html">here</a>. For an explanation about how currency and indexes (Malaysia, Sweden, Canada, etc) play a part in the model, read the post about it <a href="http://smuginvestments.blogspot.com/2008/05/biocapacity-consuming-like-american.html">here</a>.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-87858905335148997692008-06-24T18:39:00.001-04:002008-06-24T18:41:28.076-04:00Smug ContributionsFYI, check out the Smug contribution to <a href="http://www.work.com">Work.com</a>'s "How-to" guides - our quick and dirty guide to investing in green assets.<br /><br />See it <a href="http://www.work.com/green-investing-11112/">here</a>.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-11663439464380543342008-06-23T15:00:00.000-04:002008-06-23T15:28:02.906-04:00Local Vs. Green: Cage MatchThere is a lot of barking about green energy, sustainable lifestyles, and all things eco. In the end though, it's <span style="font-weight: bold;">far more important to be local than green</span>. Supporting local economies, especially agriculture, would save far more energy than any green solution. The cost of travel for a tomato out of season versus buying tomatoes locally during the season and canning them yourself is obvious, but even the externalities are obvious: more pollution, greater infrastructure strain, more exposure to disease (like the recent salmonella scare) when not buying local.<br /><br />As an investor, I like the idea of having a small portion of my stock allocation in "local only" companies. Even when it means I own some volatile small cap stocks, it gives you a proxy vote and allows you to help shape your local community as a shareholder. Plus, you have a <span style="font-weight: bold;">local knowledge</span> of the companies you invest in: you may have friends that work there, you can see their expansions (or retractions), you know their community involvement... it's like rooting for a sports team. Investing locally is <span style="font-weight: bold;">VERY HARD</span>, takes a lot of research, and can be a money losing proposal - especially in tiny tiny markets or states. But there's no reason "local" can't be expanded to a more regional presence (ie, a Rhode Island native investing in Connecticut and Massachusetts companies as well). For more info on local investing, check this awesome listing on<a href="http://www.pbs.org/nbr/statestocks/"> PBS's Nightly Business Report website</a>.<br /><br />On a macro level, you may not be able to invest locally quite the same way, but you can at least try the <a href="http://www.ccmfixedincome.com/individual/">CRA Qualified Investment Fund</a>:<br /><br />Ticker: <a href="http://finance.google.com/finance?client=ig&q=CRATX">CRATX</a><br />Inception: March 1, 2007 (officially, but CRA Shares have longer track record)<br />Asset Type: Mutual Fund - Bonds<br />Markets: Domestic<br />Smug Category: <span style="font-weight: bold;">Bond</span><br />Included in Smug Asset Pool?: Yes<br />Returns:<table valign="top" cellpadding="3" width="100%"><tbody><tr><td nowrap="nowrap" width="50%"> YTD </td> <td align="right" width="30%"> -0.23% </td> <td><br /></td> </tr> <tr> <td nowrap="nowrap" width="50%"> 1 year </td> <td align="right" width="30%"> 5.47% </td> <td><br /></td></tr></tbody></table><br />Min Investment: $2,500<br />Min Retirement Investment: $2,500<br />Minimum Additional: $1,000<br />Sales Load:<br />$2,500 to $24,999.99: 0.00% of offering price<br />$25,000 to $99,999.99: 0.00% of offering price<br />$100,000 or more: 0.00% of offering price<br /><br />Management Fees: 0.40% for 2007<br />12b-1 Fees: 0.25%<br />Other fees: 0.31%<br />Total Annual Fee: 0.96% for 2007<br /><br />Another no-load no-redemption-fee fund, CRA fund actually has a 7+ year track record, but they changed their name and ticker last year, hence the shortened record. CRATX invests entirely in debt that qualifies for the <a href="http://en.wikipedia.org/wiki/Community_Reinvestment_Act">Community Reinvestment Act of 1977</a>. Now, the CR Act has its detractors, and one could even argue that it helped perpetuate (some say "caused, which in my opinion is ridiculous) the subprime issue. In the end, CRA does a good job (if not bureaucratic job) of building housing in local communities for those who need it. CRA detractors usually forget that it's not the individuals to whom loans are made at fault, it's the <span style="font-weight: bold;">securitization of loans, poor rating system, and Wall Street greed</span> that caused subprime. But why take responsibility when you can pass the buck to poor folks?<br /><br />As debt funds go, CRATX offers a good deal of leg on its income at 4.25% SEC yield, and they have some really nice details about the effect the fund has on local communities (see the charts in the PDF): 140,000 affordable rental units, 4,660 mortgages, $27.3M in affordable healthcare, $121.4M in community redevelopment, etc.<br /><br />So feel smug and give it a look - another nice compliment to your socially responsible, sustainable portfolio. As always, see my disclaimer to the right of the page.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-1081645188795915833.post-88263889271633041272008-06-20T13:48:00.000-04:002008-06-20T13:48:00.654-04:00Not Quite Green IncomeOne of the basic things I learned in the non traded REIT (real estate) market is: it's all about the yield. Or at least it <span style="font-weight: bold;">used</span> to be before subprime. Now there's a question of credit and resale value. But, as a risk averse investor, I would rather take a stable 6% a year with virtually no volatility than a 10% return with moderate volatility. In my hedge fund, I spend all day watching volatility (or, at least, the model does), measuring vol, and scoring potential vol before investing. Most individuals <span style="font-weight: bold;">don't</span> have the tools, time, information, or understanding to measure vol at a constant basis, and that means it may be worth it to not take the risk. While green income doesn't yet exist (though, it's on it's way), there are responsible ways to invest in income vehicles - <a href="http://paxworld.com/funds/high-yield-fund/">Pax World High Yield</a> is one example<br /><br />Ticker: <a href="http://finance.google.com/finance?q=MUTF:PAXHX">PAXHX</a><br />Inception: October 8, 1999<br />Asset Type: Mutual Fund - Bond<br />Markets: Global<br />Smug Category: <span style="font-weight: bold;">Bond</span><br />Included in Smug Asset Pool?: Yes<br />Returns:<table valign="top" cellpadding="3" width="100%"><tbody><tr><td nowrap="nowrap" width="50%"> YTD </td> <td align="right" width="30%"> 1.67% </td> <td><br /></td> </tr> <tr> <td nowrap="nowrap" width="50%"> 1 year </td> <td align="right" width="30%"> 2.75% </td> <td><br /></td> </tr> <tr> <td nowrap="nowrap" width="50%"> 3 year annualized </td> <td align="right" width="30%"> 6.82% </td> <td><br /></td> </tr> <tr> <td nowrap="nowrap" width="50%"> 5 year annualized </td> <td align="right" width="30%"> 7.10% </td> <td><br /></td></tr></tbody></table><br />Min Investment: $250<br />Min Retirement Investment: $250<br />Minimum Additional: $50 automatic investment, $250 otherwise<br />Sales Load:<br />$2,500 to $24,999.99: 0.00% of offering price<br />$25,000 to $99,999.99: 0.00% of offering price<br />$100,000 or more: 0.00% of offering price<br /><br />Management Fees: 0.83% for 2007<br />12b-1 Fees: 0.25%<br />Other fees: 0.71%<br />Expense Waivers: -0.78%<br />Total Annual Fee: 1.01% for 2007<br /><br />Pax, as a company, has several funds I like, including the <a href="http://paxworld.com/funds/womens-equity-fund/">Women's Equity Fund</a> (formerly a separate entity, bought out last year by Pax) and the brand new-ish <a href="http://paxworld.com/funds/pax-world-global-green-fund/">Global Green Fund</a>. However, for income and stability, there aren't many funds like Pax High Yield with a commitment to socially responsible and sustainable investing. Interestingly, and I think calculatingly, Pax chooses to minimize it's emphasis on the socially responsible and sustainable message in their prospectus, but it's nonetheless a part of the company ethos. On the website are large sections devoted to community investing, responsible shareholder voting, and sustainable investing in general.<br /><br />In terms of performance, PAXHX is currently yielding a hefty 6.8% and pays on a monthly basis. That's pretty attractive for the DIYer considering it's a no load fund (despite some high management fees). It's currently 25% or so globally allocated to defray some of the domestic risk, and is currently valued below it's year average as it (along with everything else) saw a dip last October. Pax as a company is definitely worth a look, and the High Yield Fund is a good place to start.<br /><br />PAXHX is currently in my asset pool, and in the interests of disclosure, and I currently own shares personally. <span style="font-weight: bold;">PLEASE READ THE PROSPECTUS BEFORE INVESTING.</span> Though I may own and use this asset in my portfolios, it may not be the correct fund for your individual situation, so this post is by no means a recommendation that you purchase. Please read the prospectus in full before choosing to invest.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-29688060056261509562008-06-18T13:37:00.004-04:002008-07-17T22:30:12.776-04:00Changing Tack *So I'm going to change the tact of this blog a bit and focus more on the asset pool. I'll still go over my start up process from time to time, but I think the more important information is how a retail investor can invest responsibly. I'll focus primarily on mutual funds and ETFs, since it is my belief that individual stocks is, for the most part, playing darts with money. Mutual funds and ETFs spread out the risk and take more "sector" type positions, and I am as risk averse as they come.<br /><br />So, in that vein, my bread and butter "green" fund is one of the longest running green energy mutual funds in the country - the <a href="http://www.newalternativesfund.com/index.html">New Alternatives Fund</a> (MUTF: <a href="http://finance.google.com/finance?client=ig&q=NALFX">NALFX</a>). New Alternatives has a long track record, which many investors swear by. In my opinion, their true strength isn't their track record (which is excellent), but their innovation in investing green literally decades before anyone else thought to. Here's the rundown and the fine print:<br /><br />Ticker: <a href="http://finance.google.com/finance?client=ig&q=NALFX">NALFX</a><br />Inception: September 3, 1982<br />Asset Type: Mutual Fund - Equities<br />Markets: Global<br />Smug Category: <span style="font-weight: bold;">Total Green</span><br />Included in Smug Asset Pool?: Yes<br />Returns:<br /><table valign="top" cellpadding="3" width="100%"><tbody><tr><td nowrap="nowrap" width="50%"> YTD </td> <td align="right" width="30%"> -5.06% </td> <td><br /></td> </tr> <tr> <td nowrap="nowrap" width="50%"> 1 year </td> <td align="right" width="30%"> 1.71% </td> <td><br /></td> </tr> <tr> <td nowrap="nowrap" width="50%"> 3 year annualized </td> <td align="right" width="30%"> 20.48% </td> <td><br /></td> </tr> <tr> <td nowrap="nowrap" width="50%"> 5 year annualized </td> <td align="right" width="30%"> 18.90% </td> <td><br /></td></tr></tbody></table><br />Min Investment: $2,500<br />Min Retirement Investment: $2,000<br />Minimum Additional: $50 automatic investment, $250 otherwise<br />Sales Load:<br />$2,500 to $24,999.99: 4.75% of offering price<br />$25,000 to $99,999.99: 3.85% of offering price<br />$100,000 or more: 2.91% of offering price<br /><br />Management Fees: 0.53% for 2007 - based on AUM.<br />12b-1 Fees: None<br />Other fees: 0.42%<br />Total Annual Fee: 0.95% for 2007.<br /><br />All in all, the fine print is not too bad. However, like most small and mid cap mutual funds, New Alternatives will have some risk attached, as it tracks the market fairly closely. It has an over 20% standard deviation for it's 10 year track record, which is right in line with the S&P. When I spoke to them about their management strategies, it was clearly a mish mash of technical and "subjective factors" (which is code for "gut"). My big takeaway when doing my due diligence was this: if New Alternatives has historically more or less tracked the market, and they employed industry standard investment strategies, <span style="font-weight: bold;">why would I need to invest irresponsibly to get results?</span><br /><br />The argument against green and socially responsible investing has been that you give up profit since you limit your asset pool. If that were true, shouldn't a majority of global mid and small cap funds outperform New Alternatives and others like it? Then why isn't it true? Ultimately, when given the choice between a basic small or mid cap mutual fund that invests "irresponsibly" and a fund that invests with sustainable energy as its focus, if they both perform similarly, why not be responsible?<br /><br />Such is not to say that all managers are created equal, but if the historical returns are the same, it can often come down to combination of investment style and intangibles (the "I like Joe in investor relations" argument).<br /><br />As the elder states(wo)men of green energy investing, New Alternatives is definitely worth a look. Their asset pool is pretty specifically defined in the prospectus as investing in solar, wind, hydro, geothermal, biomass, fuel cells, hydrogen, and energy conservation/enabling technologies. That's a lot of tech in there, with some recycling thrown in, so expect some decent volatility. In my opinion, the little things can be as telling as the overall investment strategies. For instance, New Alternatives send out quarterly reports and paperwork on recycled and post consumer paper. The reports are typically one color simple text reports, minimizing the "flare" and substituting well thought out, substantive reports. It's a clear sign that, despite having over $300M under management, they haven't lost their grassroots appeal. It is definitely worth a look.<br /><br />NALFX is currently in my asset pool, and in the interests of disclosure, and I currently own shares personally. <span style="font-weight: bold;">PLEASE READ THE PROSPECTUS BEFORE INVESTING.</span> Though I may own and use this asset in my portfolios, it may not be the correct fund for your individual situation, so this post is by no means a recommendation that you purchase. Please read the prospectus in full before choosing to invest.<br /><br /><br />* - Thanks Gregory for being sure I keep my ridiculous malapropisms to myself!Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1081645188795915833.post-54757343685192936752008-06-02T15:48:00.001-04:002008-06-18T16:42:48.175-04:00Oh Money Where Art ThouSo my concerns about starting a business, like anyone starting a business, are many. And, like anyone starting a business, the primary concern is money.<br /><br />I should start by saying that my mission, other than injecting some much needed long term responsibility into investing, is to be the <span style="font-weight: bold;">anti-hedge fund</span>. Even look at my name, "<a style="font-weight: bold;" href="http://www.smuginvestments.com/">Smug Investments LLC</a>" - it's like I'm kicking old white men in the teeth a bit (sorry old white men, no offense!). I want to be as <span style="font-weight: bold;">open source</span> as humanly possible. Without sacrificing the ability to make a meager salary, of course. I grew up using open source, hacked, and warez software in the information age. I've used the interweb for 17 years or so, I like that I don't have to pay someone to learn how to fix my bike or file legal documents, since the information is readily available if you are patient in searching and willing to work at it. I think my fund should be similar. <span style="font-weight: bold;">No more secretive shenanigans. No more hedge fund implosions and subprime riduculosity</span> (I coined that phrase, of course). Instead, let's talk about what the fund does, why it does it, and how I set it up.<br /><br />Since open source is as much about freedom of information as it is about community, I want to lay out the fees, mine and the standard, to go through. Anyone into hedge funds knows about <span style="font-weight: bold;">2 and 20</span>, which basically means a 2% annual "management" fee and 20% of new profits taken quarterly. Now, that's a lot of fees. People balk at mutual funds that charge 1.5% in management fees. In fact, a good argument can be made for <a href="http://www.vanguard.com/"><span style="font-weight: bold;">Vanguard</span> </a>as your sole source of mutual funds, since they are either low cost or free of fees entirely. In fact, DIYers <span style="font-weight: bold;">should</span> be using Vanguard and a series of ETFs, and screw professional management all together for the most part. You'll understand why when you see the fee chart below. The fees listed are actual fees from a fund I've sold before. They do <span style="font-weight: bold;">not</span> include interest or dividend income (which is really just a way to make fees look lower):<br /><br /><table str="" style="border-collapse: collapse; width: 279pt;" border="0" cellpadding="0" cellspacing="0" width="372"><col style="width: 119pt;" width="159"> <col style="width: 104pt;" width="138"> <col style="width: 56pt;" width="75"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl25" style="height: 12.75pt; width: 119pt;" height="17" width="159">Fee Type</td> <td class="xl25" style="width: 104pt;" width="138">Fee Payee</td> <td class="xl25" style="width: 56pt;" width="75">Annual %</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Brokerage Fees</td> <td>Prime Broker</td> <td class="xl26" num="6.6E-3">0.66%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Management Fees</td> <td>Trading Advisor</td> <td class="xl26" num="0.01">1.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Management Fees</td> <td>General Partner</td> <td class="xl26" num="1.0999999999999999E-2">1.10%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Agent Fees</td> <td>Selling Agents</td> <td class="xl26" num="0.03">3.00%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Incentive Fees</td> <td>Trading Advisor</td> <td class="xl26" num="5.0000000000000001E-3">0.50%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">General Partner Fees</td> <td>General Partner</td> <td class="xl26" num="8.3333333333333339E-4" fmla="=0.01/12">0.08%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Adminstrative Fees</td> <td>Service Providers</td> <td class="xl26" num="7.4999999999999997E-3">0.75%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><br /></td> <td class="xl24">Total Annual:</td> <td class="xl27" num="7.0933333333333348E-2" fmla="=SUM(C2:C8)">7.09%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><br /></td> <td><br /></td> <td><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td colspan="3" style="height: 12.75pt;" height="17">Incentive fees are 25% of net new profits paid quarterly</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><br /></td> <td><br /></td> <td><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td colspan="3" style="height: 12.75pt;" height="17">"General Partner fees" consist of 1% of profits/losses</td> </tr> <tr style="height: 12.75pt;" height="17"> <td colspan="2" style="height: 12.75pt;" height="17">per year taken by the General Partner</td> <td><br /></td> </tr> </tbody></table><br />So let's go over this bit by bit. Firstly, it's obvious that hedge fund companies basically pass along virtually every operational cost they can think of to their investors. These are in the form of "Management" fees (in this case, there are two payees: the General Partner <span style="font-weight: bold;">and</span> a Trading Advisor), "Administrative" fees, and "Broker" fees. Administrative fees are often capped by larger funds, anywhere from 0.75% to 0.25% per year. It still amounts to the same thing: they charge you for legal and accounting. The same is true of Broker fees, since the clearing broker needs to make their cut - trades don't come free after all. The problem with the Administrative and Broker fees is that <span style="font-weight: bold;">the investor has no say</span>. You cannot negotiate, you cannot pass go. And what you don't see, you don't know. For instance, many larger funds get kickbacks from brokers and legal/accounting firms for keeping the business with them. The accounting is often not that difficult, the legal is "ongoing", but minimal in reality, and the broker basically does what it does all day anyway. So, even though the offering memorandum names law, accounting, and broker companies, it doesn't say a peep about any conflict of interests with the fund. In fact, I have been told by a lawyer that I shouldn't try to do anything myself and should hire big name firms to look "credible." He said, "once you have investors, you just pass the cost to them anyway."<br /><br />The "Management" fees are some of the more egregious. In this case, the management fee is split between a Trading Adviser (often a third party to the fund) and the General Partner (the fund "manager"). They charge 2.1% per year <span style="font-weight: bold;">no matter what.</span> <span style="font-weight: bold;"></span>I suppose your consolation should be that if you lose all your money, they make nothing. Not that this is anything new, if you want "professional management" at a separate accounts like the institutions, it'll cost you almost the same amount. So, there is a conflict of interest that becomes apparent in this fee - what is the incentive to be profitable if you're making money anyway? Doesn't that incentivise funds to gather assets rather than make new profits? Short answer, <span style="font-weight: bold;">yes</span>. Long answer, <span style="font-weight: bold;">yes</span>.<br /><br />My favorite ridiculously stupid fee is the "Agent" fee. I was an agent, let me tell you what we did. We had Joe Investor on the phone and said, "Hey Joe, check out this fund. They're low correlation with good historical returns. We recommend it. We'll send you the paperwork." Now, Joe trusts us, so he says, "Sure. What will it cost?" We'd laugh and say, <span style="font-weight: bold;">"There's enough fees to choke a horse!</span> But returns are net of fees, just the cost of doing business." And inevitably, because they trust us, they say, "Sure! Sign me up!" <span style="font-weight: bold;">That</span> is what we do for our 2% per annum of your hard earned dollars. Of course, if Joe has a problem, we have to deal with it, but is that really worth 2%? To put 2% per year in perspective, that's $2K for every $100K. So if you invest $100K on Jan 1, and it's worth $110K on Dec 31, a 10% return, we've been getting about $2K <span style="font-weight: bold;">just for signing you up</span>. That doesn't include compounding, since agent fees are paid monthly in most cases. It just goes to show that not only are <span style="font-weight: bold;">the funds</span> ripping you off, but <span style="font-weight: bold;">so is your broker</span>. ALWAYS ask what's in it for the broker, and you'll find they're getting paid handsomely.<br /><br />Now we're on to the "Incentive" fees. Now, here's a fee I can agree with in principal. Basically, the fund is paid 20% of <span style="font-weight: bold;">new net profits only</span> on a quarterly basis. Hypothetically, this aligns the fund and the investor perfectly. It basically says, "if you don't profit, we don't profit." You'll not that there are virtually zero funds that are purely incentive fee based, since they all realize one thing: <span style="font-weight: bold;">we can and will lose money</span>. And if they lose money, they make nothing. So they cover all their bases and charge for everything just in case they implode.<br /><br />So what's a fund to do? How do I make money, be open source, and align my interests with the investor? I'm proposing a lower fee structure for one thing (see below for my proposal).<br /><br /><table str="" style="border-collapse: collapse; width: 232pt;" border="0" cellpadding="0" cellspacing="0" width="309"><col style="width: 108pt;" width="144"> <col style="width: 73pt;" width="97"> <col style="width: 51pt;" width="68"> <tbody><tr style="height: 12.75pt;" height="17"> <td class="xl30" style="height: 12.75pt; width: 108pt;" height="17" width="144">Fees</td> <td class="xl28" style="width: 73pt;" width="97">$s (Ann)</td> <td class="xl28" style="width: 51pt;" width="68">% (Ann)</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl25" style="height: 12.75pt;" height="17">Management Fee</td> <td class="xl29" num="7.5">$7.50</td> <td class="xl27" num="7.4999999999999997E-3">0.75%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl25" style="height: 12.75pt;" height="17">Brokerage Fee</td> <td class="xl29" num="7.5">$7.50</td> <td class="xl27" num="7.4999999999999997E-3">0.75%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl25" style="height: 12.75pt;" height="17">Custodian Fee</td> <td class="xl29" num="2.5">$2.50</td> <td class="xl27" num="2.5000000000000001E-3">0.25%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl25" style="height: 12.75pt;" height="17">Administrative Fee</td> <td class="xl29" num="3.3">$3.30</td> <td class="xl27" num="3.3E-3">0.33%</td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl25" style="height: 12.75pt;" height="17"><br /></td> <td class="xl29"><br /></td> <td class="xl27"><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17"><br /></td> <td class="xl24"><br /></td> <td><br /></td> </tr> <tr style="height: 12.75pt;" height="17"> <td class="xl25" style="height: 12.75pt;" height="17">Performance Fee*</td> <td class="xl29" num="2.7868985341365358">$2.79</td> <td class="xl26" num="0.25"><a name="RANGE!C8">25.00%</a></td> </tr> </tbody></table><br />And I'm going to use <span style="font-weight: bold;">local services only</span> for the administrative if I can. But ultimately, I have to charge for what I'm doing until I'm sustainable. But I will say this: I'm making my first investors free of charge for life. I haven't decided how much, maybe $1M, maybe $2M... but it will be free of all this nonsense. And I will extend the same courtesy to <span style="font-weight: bold;">any community based non profit</span> that works in any local community if they demonstrate they are committed to local sustainability or green causes. It's only fair, right?Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-1081645188795915833.post-28264167301906012912008-05-29T11:12:00.001-04:002008-06-18T16:43:16.001-04:00Biocapacity - Consuming Like an AmericanIn the midst of all the administrivia, I want to get back to talking about what's actually important - green investing! So I think I'll start by explaining a piece of my model. This is a bit tricky, since information is really the only capital, and explaining my model may make me obsolete... that said, I think it's more important to be open source than to make a killing.<br /><br /><span style="font-weight: bold;">Biocapacity Says What?</span><br /><br />I read about the biocapacity concept on the <a href="http://www.footprintnetwork.org/">Global Footprint Network</a> at first, but when I expanded my research, I realized the study has been around a long long time. Essentially, it's a combination of economics, science, and even psychology, as it measures <span style="font-weight: bold;">how much we consume versus how much pollution we output</span>.<br /><br />For my fund, I'm using mostly macro level research. <span style="font-weight: bold;">It's important to understand that I use biocapacity to NARROW MY ASSET POOL</span>, not as a indicator that a country or investment is worth investing in. To that end, I'm interested in <span style="font-weight: bold;">comparing one country's consumption and production to another's</span>. In order to do the comparison, I obviously need two sets of numbers: "consumption" and "production".<br /><br /><span style="font-weight: bold;">Consumption: Where the U.S. Gets a Gold Star</span><br /><br />The consumption, or <span style="font-weight: bold;">footprint</span>, is the easiest to measure, as it's a more tangible number for the most part. Most research doesn't include the <a href="http://en.wikipedia.org/wiki/Externality"><span style="font-weight: bold;">negative externalities</span></a> in the metrics, since it's fairly difficult to put a number behind an externality (economists have a million different ways of trying, but for the most part it's just a sketch of the reality). Instead, I'm left with a fair amount of easy numbers: carbon output, nuclear footprint, and some slightly extrapolated numbers in overfishing, deforestation, and crop footprint. The U.S. and China are the two biggest consumers on the planet. China's excuse is the 1 billion people. The U.S.? Well, we're just fat.<br /><br /><span style="font-weight: bold;">Production: Where Working in a Cubicle Doesn't Count</span><br /><br />The production, or <span style="font-weight: bold;">biocapacity</span>, is a bit more difficult, but it's a measure of resource supply. What makes it tricky is that biocapacity is more of a moving target. Resources spontaneously dry up, ecological management can change capacity, and as global warming occurs, arable land is shifting year by year to unusable land.<br /><br />The difference between these two numbers represent a country's <span style="font-weight: bold;">reserve </span>(when positive) or <span style="font-weight: bold;">deficit </span>(when negative). To compare apples to apples, these are done in global hectares per person (outside the U.S., a hectare means something). As you can see, there are some obvious logical problems than can occur with this. Primarily <span style="font-weight: bold;">"emerging"</span><span> markets</span> are favored, as they either are primarily agricultural with a minimum of industrial waste, or have massive amounts of arable land to spare. This is a-okay with me, it's basically the model's way of saying "well, they haven't screwed it all up yet."<br /><br /><span style="font-weight: bold;">Smugly Model-licious: Currency, and Why I Need More of It</span><br /><br />I've developed two distinct theories on using biocapacity metrics for investment purposes to fill the two basic ways to "<span style="font-weight: bold;">invest in a country</span>": currency and "the index." Currency is the purest way, in my opinion, since it's a direct reflection of a company or region's strength. It's also extremely liquid, and replete with speculators and the smartest of the smart, and probably the most efficient market on earth. I've linked currency directly with biological reserve, the theory being that <span style="font-weight: bold;">a country that produces more than it consumes is better positioned for long term stability</span>. This bears out on the micro level - take a company that can consistently profit versus one that is unable to keep up with its growth or overspends. Logical, right? As a long term play, I agree. That's why the model is designed to identify these countries and <span style="font-weight: bold;">put them in the asset mix</span>.<br /><br /><span style="font-weight: bold;">Smugly Model-licious: Not Your Momma's Index</span><br /><br />The second part to my (infinitely wise?) model deals with indexes. Indexes are much more a function of a market's psychology than anything else - if a market perceives itself or the world perceives a market as profitable, the index tends to do strongly. Sometimes (often), this has <span style="font-weight: bold;">nothing to do with reality</span>. The technology boom of the 90s and subsequent crash of 2000 is a perfect example. The market thought, "this is great, free money!" The reality was, "what's an internet?" When the bottom falls out, it's a long and dangerous fall. As markets are also primarily <span style="font-weight: bold;">information driven</span>, it is impossible to know what a market will do without insider information. This includes our own market, S&P 500 and the Nasdaq Composite. We're finding this out, to our detriment, with the housing bust - Wall Street made billions, you lose your house. That's the way it works!<br /><br />What an index IS good for is as a cross section for a country's public industries. And industry tends to be the primary polluter (as proven by the biocapacity studies) and consumer of natural resources. So, to narrow down the index pool to more "sustainable" industries, I used the <span style="font-weight: bold;">biological footprint</span> component to indicate which index should be included, and which was an over polluter.<br /><br />In the end, my country list looks like the below. Obviously, there are a good many listed that either can't be invested in (no index, no active currency trading), or don't make the cut on the <span style="font-weight: bold;">technical analysis</span> side of the model (used to pick the investments and timing), but it at least gives you a good sense of how biocapacity works:<br /><br /><table str="" style="border-collapse: collapse; width: 432pt;" border="0" cellpadding="0" cellspacing="0" width="576"><col style="width: 108pt;" span="4" width="144"> <tbody><tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt; width: 108pt;" height="17" width="144">Afghanistan</td> <td style="width: 108pt;" width="144">Colombia</td> <td style="width: 108pt;" width="144">Laos</td> <td style="width: 108pt;" width="144">Norway</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Angola</td> <td>Congo</td> <td>Latvia</td> <td>Panama</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Argentina</td> <td>Congo Dem Rep</td> <td>Lesotho</td> <td>Paraguay</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Australia</td> <td>Côte d'Ivoire</td> <td>Liberia</td> <td>Peru</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Benin</td> <td>Ecuador</td> <td>Madagascar</td> <td>Russia</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Bolivia</td> <td>Finland</td> <td>Malaysia</td> <td>Sierra Leone</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Botswana</td> <td>Gabon</td> <td>Mali</td> <td>Somalia</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Brazil</td> <td>Georgia</td> <td>Mauritania</td> <td>Sudan</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Burkina Faso</td> <td>Ghana</td> <td>Mongolia</td> <td>Sweden</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Cambodia</td> <td>Guinea</td> <td>Mozambique</td> <td>Switzerland</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Cameroon</td> <td>Guinea-Bissau</td> <td>Myanmar</td> <td>Tanzania</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Canada</td> <td>Honduras</td> <td>Namibia</td> <td>Turkmenistan</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Central African Rep</td> <td>Israel</td> <td>New Zealand</td> <td>Uruguay</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Chad</td> <td>Kazakhstan</td> <td>Nicaragua</td> <td>Venezuela</td> </tr> <tr style="height: 12.75pt;" height="17"> <td style="height: 12.75pt;" height="17">Chile</td> <td>Kyrgyzstan</td> <td>Niger</td> <td>Zambia</td> </tr> </tbody></table><br />So this is a taste of some of the research and metrics that go into the fund. This, to me, is the fun stuff. I could debate it all day - what country should qualify, what "sustainable" really means. But this part of the fund is one of the primary factors setting it apart from other green based funds - it expands the <span style="font-weight: bold;">idea</span> of green beyond just energy and technology. It also gets you more diversified, helps spread out risk, and just makes a lot of logical sense. If green is a mindset, shouldn't investing green be global? Hell yeah.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-1081645188795915833.post-50362463873488572332008-05-27T14:29:00.001-04:002008-06-18T16:43:51.945-04:00The Quick ListFrom time to time, I'll be putting up a "quick list" of helpful links, definitions, or things I think are or may be useful. It's sort of like a public rememberall. Yes, I just quoted Harry Potter. No, I don't have all the unabridged books on tape on my iPod (... yes I do).<br /><br /><span style="font-weight: bold;">Federal Employer Identification Number</span><br />You can apply for this <span style="font-weight: bold;">before</span> you file any LLC, LP, or Corporation papers. It'll let you get a business credit card, employees (if you can afford them), or other government perks like paying taxes. Here's the <a href="http://www.irs.gov/businesses/small/article/0,,id=98350,00.html">online application link</a>. Applying for an EIN is totally free.<br /><br /><span style="font-weight: bold;">Massachussets Limited Liability Company</span><br />Since I'm Boston based, I only know about it in MA, but most state divisions of corporation can file online now! This is great, since it saves in lawyers fees for setting up an LLC, and sometimes even more complicated entities (which translates to $3,000 more in my pocket). Here's the <a href="https://corp.sec.state.ma.us/corp/LoginSystem/login_form.asp?FilingMethod=I">application link</a>. Cost of setup in MA is $500.<br /><br /><span style="font-weight: bold;">American Express Small Business Card</span><br />In my opinion, AmEx is the best. They force you to pay your card off every month before making new purchases. This doesn't save you from running up big bills, but it does save you from running bills if you're delinquent. If anyone knows of any <span style="font-weight: bold;">local</span> credit card companies, specifically in MA for me, or elsewhere, I prefer supporting local community if I can (within reason). Go <a href="https://corp.sec.state.ma.us/corp/LoginSystem/login_form.asp?FilingMethod=I">here </a>for more information on AmEx business cards. Applying is free, acceptance is priceless (except for the finance charges and annual fee).<br /><br /><span style="font-weight: bold;">Business Cards from GreenerPrinter.com</span><br />GreenerPrinter was great to work with. They're based in Berkeley, CA (I used to live there), and have excellent quality recycled cards. I paid about $120 for a rush job on 500 business cards, and they were there a day early and perfectly done. Website is <a href="http://www.greenerprinter.com/">here</a>, check it out.<br /><br /><span style="font-weight: bold;">Delaware Limited Partnership</span><br />I'm working on this part, and this will be the actual fund for limited partners to invest in. I'll be working with a lawyer for this, but Delaware has very favorable tax law on LPs, so most every domestic hedge fund is based out of Delaware. You can reserve your LP name online at the Delaware department of Corporations <a href="https://sos-res.state.de.us/tin/Disclaimer.jsp">here</a>. Reservation fee is $99, I'll let you know how much it is to file when I get there.<br /><br />Much more to come, like the Term Sheet, Offering Memorandum, and how I actually did some of this stuff.Unknownnoreply@blogger.com0