The firm has tapped its 25-year values-based investing expertise to create sustainable funds
Bellingham, Wash. (April 1, 2015) — Saturna Capital Corporation (Saturna) announces the launch of the Saturna Sustainable Equity Fund (SEEFX) and the Saturna Sustainable Bond Fund (SEBFX), two mutual funds that will invest globally in securities of issuers rated by Saturna as low risk in the areas of the environment, social responsibility, and governance (ESG).
"We believe companies with superior environmental and governance practices exhibit less risk," says Jane Carten, president of Saturna Capital. "For 25 years we've applied and refined our values-based investment process and gained invaluable insight into the risk mitigation dimensions that sustainable factors can provide."
Saturna expects the funds will appeal to the growing number of investors who seek to incorporate sustainability and social responsibility into their investments, particularly retirement portfolios. 2014 Trends Report by the Forum for Sustainable and Responsible Investment (US SIF) states that one out of every six investment dollars lands in sustainable investment strategies, representing over $6.6 trillion in US-domiciled invested assets.
The Saturna Sustainable Funds use an integrated investment process that factors each issuer's financial stability as well as the positive sustainability characteristics relevant to its sector. As the Funds' adviser, Saturna further customized the proprietary security screening systems it has successfully used to manage award-winning Amana Mutual Funds for over 25 years. Saturna screens more than 10,000 global securities monthly to exclude issuers engaged in certain business activities, such as alcohol, tobacco, firearms, and gambling. Focusing on established, liquid issuers, Saturna incorporates multiple sector-specific ESG factors it believes reduce investment risk. These factors include workplace safety, board effectiveness, corruption potential, and others. Saturna's team of analysts continually scrutinizes the highest-rated companies, ranking them according to Saturna's estimation of future returns. Both funds employ global strategies.
Paul Meeks, CFA, manager of the Saturna Sustainable Equity Fund, points out that the Amana Funds' experience with values-based screening makes sustainable investing the evolutionary next step for the firm. "We've successfully applied screens on behalf of our clients since the 1980s. Building on that, we're continuously innovating and refining our process. With these funds we focus on the forward-looking quantitative and qualitative factors we believe will resonate with sustainability-oriented investors."
Meeks adds, "Over time, I don't believe we will continue to see a distinction between 'sustainable investing' and 'other investing' in finance – we'll be looking at socially responsible factors for all funds." Meeks is Saturna's director of institutional investing and also manages the Sextant Growth Fund.
Patrick Drum, CFA, manages the Saturna Sustainable Bond Fund, which he points out is one of the first global sustainable bond funds in the market. He currently serves as advisor to the United Nations Principles for Responsible Investment fixed income subcommittee. Prior to joining Saturna last year, Drum led ESG research and was director of fixed income portfolio management at The Arbor Group, a member of UBS Institutional Consulting Services.
Peter Nielsen, CFA, is the deputy portfolio manager of the Saturna Sustainable Equity Fund.
Bryce Fegley, CFA, is the deputy portfolio manager of the Saturna Sustainable Bond Fund.
The Saturna Sustainable Funds are a new series of the Saturna Investment Trust, which includes the Sextant Funds and the Idaho Tax-Exempt Fund. In its tradition of offering no-load, low-cost funds, Saturna has capped the expense ratio of the Bond Fund at 0.89% and the Equity Fund at 0.99%. The Saturna Sustainable Equity and Bond Funds will be available on major platforms such as National Financial Services (Fidelity), Charles Schwab, Pershing LLC, and TD Ameritrade.