oxcel, part of the solution
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Oxcel, Part of the Solution. Colin Cheng Thomas Saleh Marko Tvrtkovic Beatrice Yeung. Agenda. Problem Statement. Should Oxcel devote their funds to socially responsible investing , if so, which investment option should the endowment support, given the financial limitations? . - PowerPoint PPT PresentationTRANSCRIPT
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Oxcel, Part of the Solution
Colin Cheng Thomas Saleh
Marko TvrtkovicBeatrice Yeung
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Introduction Analysis Recommendation Conclusion
Agenda• Introduction
• Problem Statement
• Situational Analysis
• Criteria Definition
• Alternatives
• Recommendation
• Conclusion
• Questions and Answers
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Introduction Analysis Recommendation Conclusion
Problem Statement
• Should Oxcel devote their funds to socially responsible investing, if so, which investment option should the endowment support, given the financial limitations?
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Introduction Analysis Recommendation Conclusion
Situational Analysis• Full consideration of all
three pillars – Environmental, political, socio-economic
• Ecology as a framework for social existence
Polit
ical
POLITICAL
VALUES TO BE INTERGRATED WITH RESPONSIBLE INVESTING
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Introduction Analysis Recommendation Conclusion
Criteria Definition• Intergenerational Equity
– Future generations should have the same access to resources and ecological services that current generations enjoy
• Modes of Development – Based on shared prosperity and environmental
protection
Giving voice to the voiceless – the unborn
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Introduction Analysis Recommendation Conclusion
Alternatives - Funds
1. Abbe SRI• Not 100% aligned with socially responsible investing
2. Winslow Green Growth• Theme based approach to investing• Focus on domestic, small-cap companies
– High risk, high reward– More adaptable– More direct impact
• Green Mountain Coffee
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Introduction Analysis Recommendation Conclusion
Alternatives - Funds3. Calvert Social Investment Equity Fund
• Triple bottom line approach• Focus on domestic, large-capitalization companies• More diversified investment portfolio
– Lower risk– Multi-facetted investment process
• Holdings:– Pharmaceuticals and smaller companies such as Ecolab or
the Vermont Sustainable Jobs Fund
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Introduction Analysis Recommendation Conclusion
Alternatives – Decision Matrix
Funds/Criteria Performance Values Managers Structure
Abbe SRI + 0 - -
Winslow Green Growth 0 ++ + -
Calvert Social Investment
Equity+ +++ ++ ++
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Introduction Analysis Recommendation Conclusion
Recommendation: Why Calvert?• The structure of the Portfolio
– Diversity – Aligns with Goal of the Endowment – Best Encapsulates our definition of Sustainable Investing
• Performance relative to Other Funds– Best Previous Performance Performance: Lower Volatility (Variance 1.5 compared to 7.3)
• Performance relative to Benchmark– Outperforms S&P 500
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Introduction Analysis Recommendation Conclusion
Fund Performances
October 2006- September 2007 October 2007- September 2008 October 2008- September 2009
-4
-3
-2
-1
0
1
2
3Year by Year Performance
Calvert
Winslow
Abbe
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Introduction Analysis Recommendation Conclusion
Calvert versus S&P 500
October 2006- September 2007 October 2007- September 2008 October 2008- September 2009
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
Year by Year Performance
CalvertS&P 500
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Introduction Analysis Recommendation Conclusion
Fund Manager & Future Outlook• Fund Manager
– Experience: Richard England (MBA 20+ years of experience)William Hackney III (Employee since 1995, MBA)
– Total Exp. Ratio = 0.67% – Advisor Fee = 0.60% – Turnover Ratio = 51%
• Future Outlook – Calvert’s Approach: Best Captures the multi-faceted approach to
sustainability– Market Uncertainty
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Introduction Analysis Recommendation Conclusion
Further Reasoning• Transparent and Accountable
– Corporate environmental, social and governance disclosure (on both policy level initiatives and company engagement)
• Multi-dimensional – Incorporates political, socio-economic, and environmental pillars
• Inclusive – Governance and Ethics, Workplace, Environment, Product
Safety and Impact, International Operations and Human Rights, Indigenous Peoples’ Rights, and Community Relations
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Introduction Analysis Recommendation Conclusion
Further Reasoning
• Mobilize resources; Connect with stakeholders – Engage companies to improve behavior
• Innovative – Identify new untapped opportunities with potential
Transitions corporate culture to one that finances the future
“Be Part of The Solution”
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Introduction Analysis Recommendation Conclusion
Recommendation & Innovation
Invest in Socially Responsible Entrepreneurship
• Inline with Values– Investing in Local Human Capital– Gives Younger Students a Voice– Financing Future Generations
• Minimize “Principle-Al agent”– Students have vested interests and are motivated
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Introduction Analysis Recommendation Conclusion
Conclusion
Sustainability can be profitable
Aligning with your valuesCommon Opinions
Redefine Responsible Investing
Invest in Green Funds
Invest in Ideas of the Future
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Introduction Analysis Recommendation Conclusion
Questions and Answers