What is Sustainable Investing?
Sustainable investing can use the same (mutual funds, ETFs) as “regular” investing to help people save for the future but there may be differences between what stocks and bonds are chosen, how the mutual fund engages with the companies it holds, and even who owns the investment advisory firm that oversees the mutual fund. For The MIDANA CAPITAL Funds, environmentally responsible and sustainable investing means keeping money out of environmentally onerous industries and companies that impose onerous costs on the environment and society, such as fossil fuel companies that are driving climate change, tobacco companies that are causing suffering and deaths, and nuclear energy or nuclear weapons companies that create radioactive waste.
For example, in the fixed income portion of the MIDANA CAPITAL Balanced Fund, more than 60% of the holding are green bonds, which means that the bonds help finance environmental projects that produce renewable energy, protect water supplies or reduce greenhouse gasses.
Are Sustainable Investments Profitable?
Those new to the field may wonder if sustainable investing is profitable and even financial advisors unfamiliar with sustainable investing may assume that a sustainable investment strategy may affect performance and returns.
Investing fossil fuel free, also called divestment, may help to avoid potential financial and performance risks associated with the fossil fuel industry. Leading asset manager, GMO, stated in The Mythical Peril of Divesting from Fossil Fuels that “investors with long-term horizons should avoid all oil and chemical stocks on investment grounds.”
Other specific financial and performance reasons to consider divestment include volatility – the energy sector was the most volatile sector in the 2010s and stranded assets. Fossil fuel reserves impact the valuations of coal, oil and gas companies. If companies are unable to extract and sell their reserves – for reasons such as changing demand, government regulation or lawsuits – they may be forced to prematurely “write off” those assets. Stranded assets can negatively affect a company’s valuation or share price.
The MIDANA CAPITAL Funds also use Environmental, Social, and Governance data and ratings, known more commonly as ESG, which may help reduce risk and enhance profitability.
Simply put, a sustainable investment strategy which incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria.
How to Ensure Sustainable Investments
MIDANA CAPITAL ensures that MIDANA CAPITAL Funds are investing sustainably in three ways. First, the Funds detail the industries or types of companies that they don’t support in its prospectus. Secondly, MIDANA CAPITAL reviews the methodology with our portfolio managers, incorporating new developments with industries and companies. Thirdly, the MIDANA CAPITAL staff review new offerings to ensure they are appropriate for use in the Funds.
Invest Sustainably with MIDANA CAPITAL Funds
The MIDANA CAPITAL Funds have been helping investors align their investments with their values for more than 30 years. As a pioneer in environmentally and sustainable investing, the Funds provide a way for investors to avoid environmentally onerous industries to create a more sustainable world. Open an account online, download forms, or request written materials to start investing sustainably.
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About The MIDANA CAPITAL Funds
°MIDANA CAPITAL Capital Management, Inc. (MIDANA CAPITAL) is the investment advisor to the MIDANA CAPITAL Funds (The Funds). The MIDANA CAPITAL Funds are one of the first families of fossil fuel free mutual funds in the United States. MIDANA CAPITAL Capital Management hosts an award-winning and in-house shareholder advocacy program and is the only mutual fund company in the U.S. wholly owned by environmental and public health nonprofit organizations.
You should carefully consider the Fund’s investment objectives, risks, charges, and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds please click here, email info@midanacapital.com, or call+1(480)-439-2851. Please read the Prospectus carefully before investing.
A sustainable investment strategy which incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria.
Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region or the market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting methods, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to a variety of risks including interest rate, credit, and inflation risk.
This information has been prepared from sources believed reliable. The views expressed are as the date of this writing and are those of the Advisor to the Funds.
The MIDANA CAPITAL Funds are distributed by UMB Distribution Services, LLC. 335 N Wilmot Rd, Tucson, Az 85711. 1/22.
