and Fixed Income Investing
2 nd Annual CSR Investing Summit: and Fixed Income Investing US SRI Fixed Income Mutual Funds July 22, 2014 Henry Shilling, Senior Vice President July 22, 2014
Sustainable and responsible investing (SRI) drivers/trends US/European SRI Assets PRI Signatories Sources: US SIF, EFAMA and PRI. As of 12/31/2011 and 4/2014 4
Sustainable and responsible investing (SRI) Exclusionary: Tobacco, firearms, alcohol, gambling Divestment Ethical investing/exclusionary practices Impact investing Community development Health/welfare Environment (green bonds) Equity Fixed income Real estate Other asset classes Integration Shareholder advocacy Use of ownership clout to advocate for stronger stewardship policies and practices: Proxy voting, shareholder resolutions, etc. Factors Environmental Social Governance Climate change strategy Stakeholder relations Board structure Environmental policy Supply chain management Director independence Environmental practice Health and safety policy Executive compensation Pollution management Community impact assessment Shareholder rights Water supply management Product safety management Audit quality Waste management Working conditions Accounting management 5
US sustainable and responsible mutual funds Fixed Income Funds Equity/Balanced Funds SRI Funds, $15 SRI Funds, $70.8 All Funds, $3,427.3 All Funds, $9,436.8 Sources: Morningstar, ICI and Moody s analysis. Total net assets as of 5/2014 and 6/30/2014 in $ billions. 6
Fixed income SRI mutual funds: management firms Investment Manager # Funds* Total Net Assets ($ millions) Calvert Investment Management, Inc. 9 4,734.7 PIMCO 2 3,468.4 GuideStone Capital Management 6 2,718.2 Community Capital Management, Inc. 1 1,547.3 Pax World Management LLC 1 721.0 All Other (10 firms) 11 2,108.7 Totals 30 15,298.3 *Excluding share classes, as of 6/30/2014. 7
Fixed income SRI mutual funds: SRI strategies Based on prospectus reviews and company discussions. 8
Total return performance relative to benchmark Universe of intermediate-term funds: 1, 3, 5 and 10 year time intervals to 6/30/2014 9
Average turnover rates (%) 300 250 252.40 244.78 214.00 200 180.18 190.13 150 100 50 28.00 23.68 0 Exclusion Integration Thematic: CRA Integration & Exclusion Integration, Exclusion, & Impact Total Comparable Non-SRI Funds 10
Average expense ratios (%) 1.60 1.40 1.34 1.20 1.07 1.00 0.93 1.00 0.88 0.80 0.75 0.75 0.60 0.40 0.20 0.00 Exclusion Integration Thematic: CRA Integration & Exclusion Integration, Exclusion, & Impact Total Comparable Non-SRI Funds 11
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