Investing comes with risk. This article is a general discussion of the merits and risks associated with these ETFs, not a specific recommendation. Speak to an investment professional and make sure your portfolio is diversified. Tim Nash owns shares of PZD and a SolarShare bond. Tim does not own shares of the other investments mentioned in this article.
As the clock ticked midnight and we entered 2014, I decided it was a good time to review the financial performance of my model portfolios. I’m happy to report that 2013 was a great year for sustainable investment strategies, with each of my model portfolios doing about as well or better than its traditional benchmark. The following table presents annual Net Asset Value (NAV) returns from Morningstar on Jan. 6, 2014:
The best performing portfolio was the Fossil Fuel Free Portfolio. This is largely due to the underperformance the Mining sector in 2013, down 29.44% in Canada and up only 2.92% globally. By removing this sector entirely, the Fossil Fuel Free portfolio had a big advantage.
The Cleantech sector saw a big jump of 37.73% in 2013. Since most traditional investors have little to no exposure to this sector, they lost out on big gains.
Additionally, bonds were a big drag on everyone’s portfolio this year. Interest rates have remained low, and active investors have continued to shift out of bonds and into equities. While corporate and government bond prices actually declined in 2013, impact bonds continued to pay a relatively high interest rate. And since they are not traded on public markets (investors are locked in for 5-7 years), they did not decline in price. So while investors in the DEX Universe Bond Index Fund (XBB) lost 0.5% last year, impact investors gained 1.75% with Oikocredit micro bonds and 5% with SolarShare bonds. Even better, investors in ZooShare bonds are expecting to receive 7% in coming years.
As always, past performance is not indicative of future results. Still, it’s nice to know that sustainable investors were handsomely rewarded in 2013!
For detailed information on the portfolio returns, click here to download my excel spreadsheet.
