Women are often associated with caring about the environment and fossil fuel free investing. Makes sense, given that we use the term “Mother Nature.” As You Sow’s Fossil Free rating system allows us to incorporate the desire to be fossil fuel free while pursuing your investing goals, such as a carefree retirement.
Let’s examine aligning Mother Nature into your retirement and other investing goals.
Fossil Free Results
There are two ways to approach using As You Sow’s service: either evaluating your existing investments or looking to select investments to include in your portfolio.
If you are already invested in mutual funds, I recommend entering your investments into the search. You will get a score of A to F for your fund, as well as financial performance and evaluations of other issues. This article focuses on looking to select investments to include in your portfolio.
The results below show what I found April 9th, 2022, when I selected the Top Scoring Funds. Note the “Category” field on the far right. The fund types are not all the same. This article does not advise on the use of these categories for your portfolio.
The multiple differences in the categorization available, however, do suggest that there are several options for inclusion. A more complete list is available when you select the download spreadsheet button underneath the list of top funds.
Further, note in the “Fund name” column each fund is identified as either an Institutional or Investor share class. The Institutional share class is associated with larger purchases, often in the millions of dollars. Typically, there are Investor Shares available at lower investable minimums. You’ll need to check the fund company’s website to find out their minimums.
Taking a look at the financial performance of our top fossil-fuel-free funds, the “Expense ratio” column shows the difference in the share classes For example, the Parnassus Core Equity Institutional has an expense ratio of .62% while its Investor share class is at .84%. The return performance is roughly a .17% difference between the share classes on an analysis of 20-years of returns. The Parnassus Endeavor Institutional’s expense ratio is .65% and the Investor class is .88%. The difference on their 20-year returns is .11%.
You can see that there aren’t many funds with 20+ year track records, if fund longevity is a concern for you.
If you care about more than one issue, As You Sow makes it easy to look at additional ratings. Funds with multiple share classes will have the same score, as they contain the same investments.
Maybe surprisingly, the Parnassus Core Equity funds gets a score of D for Military Weapons. The Parnassus Endeavor fund gets an A in that category, and otherwise gets As and Bs for other issue screening. Both the Par Large Cap Fund and Parnassus Mid Cap Growth get F’s when screening for investments in the prison industrial complex. The Pax Small Cap and Calvert International get near straight A’s except for D’s in certain categories.
Your values are your values, so some categories may be more important to you than others. For those issues you care about, download the complete list using the download spreadsheet button, which will allow you to look across all the funds.
I highlight As You Sow’s Fossil Free tool in this article as it is publicly available. There are other tools which may have different ratings on the same fund. Two of note are MorningStar’s Sustainability Ratings and YourStake. You would need to find an advisor that has access to these tools to provide those alternative evaluations.
Can you retire comfortably invest Fossil Free? The answer is yes, but tt may not be a straightforward answer. You’ll need to determine how much money you’ll need, how much you’ll need to save, for what time horizon and at what target rate of return before and during retirement. You can then develop the portfolio mix you need of the various categories of investments and in what percentages, plugging in your choices.
Alternatively, you can find an independent Certified Financial Planner, with expertise in values-integrated investing, to assist you in your research. Either way, you should be well on your way armed with this resource.