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| Feature |
Portfolios With Purpose
Catherine Curan
03/01/2008
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Until recently, socially responsible investors have focused primarily on equities. Now a publication,
Handbook on Responsible Investment
Across Asset Classes, published in late
2007 by Boston College’s Institute for Responsible Investment, details
opportunities for incorporating social responsibility across a broad portfolio.
The following is a guide for benchmarking SRI holdings to conventional market
performance.
Cash And Cash Equivalents. SRI
products from community development banks, credit unions and loan funds.
Benchmark: Merrill
Lynch 91-day Treasury Index.
Fixed Income. Targeted
community development bond funds; screened portfolios of government or corporate
bonds. Benchmark:
Lehman Brothers’ U.S. Aggregate Index.
Private Equity. Social or clean-tech venture capital funds; private equity funds with
environmental, social and governance (ESG) programs. Benchmark: Venture Economics’ U.S.
Private Equity Performance Index.
Real Estate. Pooled debt made
with ESG criteria; developers or REITs with outstanding ESG records.
Benchmarks: NCREIF
Property Index; S&P/GRA Commercial Real Estate Index.
Hedge Funds. ESG analysis can
be applied to assets and used to identify arbitrage opportunities.
Benchmark: MSCI Hedge
Fund indexes.
Commodities. Structure
contracts to support sustainable production; require detailed ESG reporting.
Benchmark: S&P
GSCI Commodity Index.
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