Broker Check

Businesses with Impact #2 -- Calvert Impact Capital

| September 16, 2018
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There's a lot of talk these days about "impact investing". (If you are very familiar with this topic, then this note might be too elementary.)

But if you've ever wondered how to actually make these investments in a way that's both simple and easy, please read on.

Common concerns are that the act of selecting an investment to make an impact (while maintaining one's financial logic) may seem complex. Impact vehicles may feel out of reach of the average investor, or unnecessarily risky.

Fortunately, we don't think that any of these are true.  

IT DOESN'T HAVE TO BE COMPLEX

Yes, it may be more glamorous (and financially lucrative) to invest in a specific impact project,.  But one can make a sizable impact though a globally-diversified portfolio of impact sectors while earning competitive returns. One such vehicle is offered by our friends at Calvert Impact Capital.

Calvert looks at the world of impact through a philosophy that is anchored by the UN Sustainable Development Goals (SDGs). Through a single investment in the Calvert Community Investment Note, one can make an impact on nearly all of the SDGs. 

The Chart #2 below shows the main sectors in which the Community Note invests, many of which address more than one of the Sustainable Development Goals.

NOT OUT OF REACH

Thanks to Calvert's user friendly website, just about anyone can explore impact investing.  And Calvert's minimum online investment is just $20.  One can also invest through their brokerage account in specific maturities of the notes (ranging from 1 to 15-years) with just a $1000 minimum.

Importantly, Calvert communications are rich sources of information, and any investor in a Calvert note will get both quarterly and annual reports on the work that is being done on their behalf.  (If investing through an advisor, be sure to ask them to "register" your note with Calvert so that your receive communications from them.)   

Going one step further, if you're an industrious web-surfer, you can find a wealth of content on their website that explores their specific portfolio investments.

NOT TERRIBLY RISKY

Of course, all investments have risk, and past performance is not guarantee of future results.  But Calvert can rightly boast that it has returned 100% of principal and interest to investors since the inception of the notes program.  And more than $2 billion has been invested in this way since 1995.  

Rates on the Calvert notes are competitive with investments of similar risk, maturity, etc.  For a point of reference, a 5-year Community Note currently yields 3.0%, versus 2.91% yield a 5-year US Treasury note and about 3.5% on high grade 5-year corporate bonds. 

Nearly 5,000 investors have more than $390 million currently invested with Calvert Impact Capital.  A recent increase in the rates paid on their notes promises to attract even more of them. 

As always, we welcome your comments and questions.  Calvert is the"tip of the impact investing iceberg" and a great place to start.

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