As we enter the holiday season, you might be looking for ways to give back to others. Especially in these stressful and turbulent times.
And while it’s not often the two go hand in hand, there are ways to give back to your favorite charitable causes… and make a decent return, too.
It’s called “impact investing.”
And it involves investing in companies that benefit society. For example, companies that focus on green energy… or businesses that build affordable housing.
And these aren’t just feel-good types of investments, either. They’re real-world ideas that often outperform the market.
Take the MSCI All Country World Index Fund (ACWI)… and MSCI ACWI ESG Universal Index. (ESG stands for Environmental, Social, and Corporate Governance.)
ACWI covers 3,000-plus stocks in 49 countries. So it’s a good proxy for global markets. And as its name implies, ESG focuses on impact investing.
The ESG version of the index has beaten ACWI in seven out of the past 10 years. And it’s outperforming in 2020, too.
ESG-focused exchange-traded funds (ETFs) have seen record asset flows during the pandemic. They recently hit an all-time high of over $100 billion in assets.
Today, I’ll show you how you can potentially earn up to 7x times the interest you’d receive on a Treasury note by investing in causes near and dear to your heart…
Turn Your Investment Into Philanthropy
Calvert Impact Capital’s Community Investment Note is a chance to profit from supporting causes you support.
I recently spoke to Justin Conway, Calvert’s vice president of investment partnerships.
He says the note (a fixed-income security) is a convenient way for people to invest in real-world causes:
Impact investing is a great complement to one’s philanthropy. You can earn returns while advancing the causes important to you. Many investors choose short terms to start. But after they see the positive impact their investment is having in communities, about 90% of them reinvest at maturity.
The note supports nine atypical sectors. For example, Calvert Impact Capital’s partners have helped:
Create or preserve 72,404 homes.
Finance 4,361 schools and educational institutions.
Serve 5,700,000 healthcare patients.
Create or retain 486,357 small business jobs.
Reduce 160,633 tons of waste.
Support 73,945 smallholder farmers.
And these investments are actually bearing fruit…
Take ECLOF International, for example. It’s a Calvert Impact Capital borrower. And its mission is to promote social justice and human dignity through microfinance. It provides loans and assistance in 12 countries across Africa, Asia, and Latin America.
More than 18,000 people have invested over $2 billion in the program since 1995. And since then, Calvert’s has a record of 100% repayment of principal and interest.
But this is not a donation. Beyond a social return, the Community Investment Note offers an attractive financial return.
Here are the rates and terms as of November 2020:
You might think these returns look low. But all five options have much higher rates – anywhere from 6x to 10x greater – than traditional income-producing assets like certificates of deposit (CDs) and Treasurys.
For instance, if you put $10,000 in a 15-year Treasury note, you’d make $200 in income. The same $10,000 in a typical CD over 15 years would return a paltry $175.
But if you put $10,000 in Calvert’s 15-year note, the return would be $1,250. That’s 525% more – just for investing in a good cause.
A Win-Win Scenario
If you want to get into impact investing, consider the Community Investment Note.
Not only does your money go to a good cause… you also earn a higher interest rate than traditional options. And at the end of the term, you get your money back. Best of all, you can start with as little as $20.
If you want more information about the Calvert Impact Capital’s Community Investment Note, click here. As always, do your homework before making any investment.
It feels good to help someone else in need. But if you can also make money while doing so… it’s a win-win scenario.
Analyst, Palm Beach Daily
P.S. Let us know if you plan to take part in an “impact investment.” And tell us if you’d like to hear about other opportunities in this space by emailing us here.