FAQs
» What environmental benefits do your fixed income investments support?
» What types of fixed income securities finance "green" programs/initiatives?
» How do you construct a market-rate "green" bond portfolio?
» Are there constraints in the management of a "green" bond portfolio?
» How can I make an investment in a "green" bond portfolio?
Our environmental research begins by looking to see what the investment is financing and if it has one or more of the following benefits: rehabilitative housing/adaptive reuse; energy efficiency; revitalization/redevelopment in targeted disadvantaged areas; renewable energy, meeting energy codes; infill development; recycled materials, water conservation; proximity to services and employment/access to transit; developing brownfields; and the remediation of environmental hazards. For example, one of our investments financed an affordable multifamily housing property that incorporated recycling of building materials, water conservation features, and energy efficient housing. Another example is a bond that provided financing to an environmentally-friendly business to help expand its operations and hire skilled employees for green jobs.
What types of fixed income securities finance "green" programs/initiatives?
As mentioned in our investment process, Community Capital invests the majority of a portfolio in the following sectors: Taxable Municipal Bonds; Multifamily (Agency) Mortgage Backed Securities (MBS); Asset-Backed Securities (securitized pools of Small Business Administration (SBA) loans and United States Department of Agriculture (USDA) loans); and Single Family (Agency) MBS. Based on our research, we do not apply the allocation to Single Family MBS as an environmental investment.
The portfolio management team actively seeks to identify fixed income securities from our eligible universe (mentioned above). Bonds meeting this screen are examined within the context of the entire portfolio, placing specific emphasis on credit quality (at or above AA+), duration (+/- 15% vis-a-vis the benchmark (typically the Barclays Capital Aggregate Bond Index)), and that the financial characteristics of the portfolio remain within pre-established ranges.
Are there any constraints in the management of a "green" bond portfolio?
Our investment philosophy and process remain the same across all portfolios. The "green" component is an optional secondary screen that can be applied to a portfolio whereby bonds are identified that finance environmental programs and initiatives. There may be a limit to the size of the strategy based on the availability of bonds meeting the environmental screen.
How can I make an investment in a "green" bond portfolio?
Community Capital Management offers two investment vehicles: a mutual fund (minimums vary per share class) and separately managed accounts (minimum: $5 million). The philosophy, strategy, and management of both products are the same. For investments over $500,000 in the mutual fund and for all separate accounts, an "environmental research" report will be provided for each "green" investment highlighting the project and its environmental benefit.