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March 21, 2001
Mutual Fund Breaks New Ground in Community Investment

The CRA Qualified Investment Mutual Fund now allows investors to direct their money to specific communities.


Some individual and institutional social investors may be looking for an investment opportunity that not only offers competitive returns, but also invests the money in a community of the investor's choice. Those investors do not have to search any further. CRA Fund Advisors announced yesterday that its concept of "Direct Impact Investing" is going to be made available through its CRA Qualified Investment Fund (ticker: CRAIX). With Direct Impact Investing, investors can specify which community receives their money. The CRA Qualified Investment Fund is the first mutual fund that allows investors to control which communities benefit from their investment.

"We are very excited at the potential for Direct Impact Investing to bring a new universe of investors to community investing," said Todd Cohen, a principal with CRA Fund Advisors. "For those investors who demand competitive returns but wish to see their dollars making an impact, this vehicle means a new world of possibilities," he added.

CRA Fund Advisors, based in Weston, Florida, takes its name from the Community Reinvestment Act. The Community Reinvestment Act, a regulation enacted by Congress in 1977, requires that federally insured deposit institutions be evaluated periodically on how well they are meeting community credit needs. The CRA Qualified Investment Fund was originally developed to help banks meet Reinvestment Act requirements.

The fund invests in securities that have community development as their primary purpose and are rated A or better by recognized organizations such as Standard & Poor and Moody. It also invests in securities that CRA Fund Advisors deems to be of comparable quality, or securities that are credit-enhanced by one or more entities with an A or above rating. According to Cohen, "Our current portfolio includes single- and multi-family mortgage-backed securities, project loans, government guaranteed notes, taxable municipal bonds, and money markets."

The fund's average annual return from its inception on August 30, 1999 to February 28, 2001 is 8.24 percent. Its assets have grown to more than $35 million with a diverse group of investors, including banks, savings and loans, and not-for-profit organizations.

"Competitive performance [of the CRA Qualified Investment Fund] will undoubtedly capture the attention of mainstream fixed-income investors who might not otherwise consider community investing," said Cohen.

CRA Fund Advisors utilizes a network of thousands of mortgage originators, community development organizations, and broker dealers to identify or help create securities that meet the needs of specific investors. This resource allows CRA to focus on a particular neighborhood and offer Direct Impact Investing through the Qualified Investment Fund. When there is a shortage of suitable securities, CRA looks at a broader region or the whole state.

Cohen can relate numerous stories that illustrate the impact the Qualified Investment Fund has had in local communities. For example, the fund invested in the mortgage-backed security refinancing of a 100-bed nursing home in Atlanta. Refinancing at lower interest rates enabled the facility to continue providing an adequate supply of affordable rental housing and health care. Medicaid patients account for about 86 percent of the occupied beds.

The CRA Qualified Investment Fund is a natural choice for individual and institutional investors seeking a painless but competitive option for investing in specific communities. Not only will they get a return comparable to conventional fixed-income securities, they can be sure that their investment will benefit their neighbors.

 

 
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