March 11, 2008
EarthFolio Screens the Big SRI Picture
by Anne Moore Odell
New investment site offers fully managed SRI portfolios for every type of investor, from timid to
One short questionnaire later, visitors to the newly launched EarthFolio website are matched to a
SRI portfolio based on their investment needs and style: conservative, balanced, growth, or
aggressive growth. Available for investors in all fifty states from Blue Marble Investments, EarthFolio bills itself as the first online site to offer fully
managed portfolios composed of socially responsible mutual funds.
managers believe that its simplicity and convenience will draw customers. Arturo Tabuenca, founder
and portfolio manager, told Socialfunds.com: "Unless you're a large institutional investor, it's
still extremely difficult to find professional guidance when it comes to socially responsible
investing. A recent survey by Allianz reveals that although 71% of investors classify
environmental technology as a 'buy,' less than one out of five investors has ever had an
environment related investment opportunity recommended to them by their advisor."
Tabuenca continued, "EarthFolio solves this issue by providing ongoing professional management
that specializes on SRI issues and delivers it through the convenience of the Internet."
EarthFolio applies financial, social, and environmental screens to the mutual funds it
purchases. The twelve SRI screens it uses (beyond the financial screens it applies) include the
environment, human rights, animal testing, employment equality, labor relations, weapons, tobacco,
alcohol, gambling, products and services, corporate governance, and community investment.
EarthFolio also considers a mutual fund's record of shareholder advocacy in the twelve areas of
SRI interest. The EarthFolio website allows visitors to select any of the SRI areas and read more
about what funds are doing to engage companies, from filing resolutions at fast food companies
asking for more humane methods of slaughtering animals to addressing predatory lending practices at
major financial institutions.
The EarthFolio Conservative Portfolio is calculated to
provide regular income or gradual growth. As of its last balancing at the end of 2007, it was 56%
bonds and 28% US stocks. Portfolio mutual funds holdings include Sierra Club, Domini and Calvert.
EarthFolio furthermore provides the top 20 stocks overall and the top 20 sustainable stocks in the
four portfolios. In the Conservative portfolio, some of the top 20 sustainable stocks include First
Solar, Whole Foods Markets, and Herman Miller. The Conservative Portfolio was the last of the four
portfolios created, launched in October 2005.
The EarthFolio Balanced Portfolio, launched
in March 2001, holdings include the mutual funds MMA Praxis, Vanguard, and Powershares. Some of
its top sustainable stocks include Plug Power, Ballard Power Systems, and Acciona Group. Its
objective is long-term growth with downside protection.
The EarthFolio Growth Portfolio
was launched in November 2000 and has seen a cumulative return since inception to the end of 2007
of 42.37%. It is composed of 70% equity/30% fixed income with the objective of superior long-term
growth. Some of its mutual funds include Ariel Mutual Funds, Calvert, and Citizens Fund. Evergreen
Solar, EOG Resources, and Interface are found among its top 20 sustainable stocks.
EarthFolio Aggressive Portfolio is geared toward maximum long-term growth. Started in November
2001, the portfolio is composed of 100% equity. Its yearly return in 2007 was 3.70% against the
portfolio benchmark S&P 500's return of 5.5%. Overall since inception the cumulative return of the
Aggressive Portfolio is 44.08%. Mutual funds represented include Portfolio 21, Powershares, and
Winslow Green Growth Fund.
Besides the ease of a one-stop shop site, EarthFolio also
distinguishes itself with its low fees, which are scaled to the size of the investment. All four
portfolios have a minimum account size of $50,000 with a one-time account set-up of $249 and a
yearly advisory fee that is determined by the portfolio type and the assets invested. For accounts
from $50,000 to $3 million there is a tiered advisory fee and for larger accounts of $3 million or
more, there is a flat annual fee. All the annual fees are less than 1%. For example, the first
$200,000 in a Conservative Portfolio there is a .70% annual fee while the aggressive portfolio fee
for the first $200,000 is 1%.
"EarthFolio has one of the lowest cost structures for a
professionally managed portfolio," said Tabuenca. "Other than the underlying mutual fund expenses,
the portfolios carry no loads, no transaction fees and no custodial fees. Instead, there are only
two straightforward fees: A one-time account set-up charge of $249 and then an ongoing yearly fee
of 1% or less. This cost structure allows for much greater portfolio diversification and the
ability to continually update and monitor the portfolios without any added costs to the investor."
EarthFolio is registered under Blue Marble Investments, which Tabuenca founded in 2000.
Blue Marble is dedicated exclusively to serving socially responsible investors. Currently it serves
clients in 29 states and has licensed its EarthFolio models to over 4,000 investment advisors. This
is the first time that Blue Marble has made its portfolios available online.
quote by Alan Kay that says, 'The best way to predict the future is to invent it.'," said Tabuenca.
"To me this is the key to not only solving the daunting challenges that we face, but just as
importantly, the key to unlocking the immense potential that a sustainable economy has to offer.
For instance, a lot is made about how we can transition to a clean and independent energy grid-and
that's a welcome change. But it's not simply about getting more and more energy. It's about
rethinking why we need so much energy in the first place. Companies and industries that understand
this whole systems approach to the world and business will be the titans of the 21st century."