How We Invest

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We take our fiduciary responsibility seriously. After all, it’s your life savings we’re managing! We’re committed to fiscal discipline, using an asset allocation approach that is customized to your financial situation. We follow rigorous professional standards, with Accredited Investment Fiduciaries (AIF®), Certified Financial Planners (CFP®), and a Holistic Financial Planner in-house.

Through our relationships with Charles Schwab & Co, First Affirmative Financial Network, fi360, and other service providers, we have access to research tools that enable us to give sound financial advice while keeping custodial and transaction costs low.

Our Approach to Investing: Diversification, Model Portfolios, Monitoring the Markets

Natural Investments conducts extensive research on the wide array of investment securities available to socially responsible investors. Equally important is understanding how combinations of securities work together to reduce risk and enhance performance. With the work we’ve put into our investment research, we have confidence in guiding our clients through the sometimes-challenging securities markets.

We use a standard Asset Allocation approach, which is the practice of diversifying investments among a variety of securities categories. There are lots of categories, and we encourage diversification into a wide variety because they tend to have different benefits and risks. When some of them may be performing poorly, others may be performing well. This makes for a smoother ride, and is the most reliable and consistent way to earn solid returns while managing risk levels to match your comfort level.

Nearly every category of financial assets now has competitive, socially responsible mutual funds and money managers from which we can build well-diversified portfolios. We conduct ongoing, in-depth research on the leading SRI mutual funds and money managers and utilize those that have solid performance within their asset category.

The NI team works together to design and periodically adjust three model portfolios across five risk levels that reflect a range of risk tolerance or comfort, while meeting our rigorous financial criteria (see the Risk Tolerance page for more on learning where you may fit). In addition to our Classic SRI model, we feature a Green Economy model with greater exposure to green sectors as well as a Fossil Fuel Free model (see section below).

We have several key strategic relationships which allow us to provide exceptional portfolio management services. We are members of the Social Investment Forum, the U.S.-based SRI trade association, through which we can access industry trends and a clearinghouse of SRI research and resources. Our membership in First Affirmative Financial Network (FAFN), a national association of SRI advisors, provides financial and social research tools such as the Center of Fiduciary Studies’ Fiduciary Analytics, IdealsWorkTM, and KLD PassTM company research reports. FAFN also offers a variety of managed separate account programs that are available through NI.

Low Risk, High Social Impact Options

For the low risk, high stability portion of our portfolios, we take advantage of many of the top performing, socially responsible bond funds. To help our clients protect against periodic weakness in the US dollar, we include international bond funds. We also invest directly in the bonds of US Government Agencies, which support home loans, agricultural loans, and student loans. An exciting addition to our bond offerings are investment such as Calvert Community Investment Notes, which make funds available for high-impact social projects such as micro-loan plans both in the US and abroad, real estate programs in low income communities, and similar initiatives.

Fossil Fuel Free Portfolio

In response to the central role of climate change in our time, and in solidarity with 350.org and others who are advocating for divestment from fossil fuel companies, The Natural Investments Fossil Fuel Free Portfolio, available from any of our advisors, includes ten fixed income and equity funds across six global asset categories that exclude fossil fuel extraction and exploration companies, and it is available to investors who wish to have conservative up to a moderately aggressive portfolio. A portion of the advisory management fee is donated to non-profit organizations working on climate change and sustainability issues. As with all Natural Investments portfolios, the Fossil Fuel Free Portfolio includes many other environmental, social, and governance criteria in addition to excluding fossil fuels. The portfolio will also be available for 401(k) plans on the Social(k) platform soon.

While the Fossil Fuel Free Portfolio is primarily a retail product that uses mutual funds, Natural Investments maintains a version for accredited investors that uses separate account managers in order to exclude additional fossil-fuel-related industries such as transportation, auto parts, and engines.

Continuous Monitoring, Prudent Adjustments

NI recognizes that markets have historically been cyclical in their performance, and that timing the market on a daily or even quarterly basis is unlikely to benefit client returns. We prefer to take a long-term approach, commonly referred to as “buy and hold,” to achieve long-term performance, rather than basing decisions on temporary market timing factors.

We generally do not make adjustments to our models more frequently than quarterly, but may do so if economic circumstances warrant, or whenever information becomes available that may materially affect an investment. We analyze fund performance in each asset class on at least a quarterly basis in order to determine the holdings and weightings of the portfolios. NI advisors participate in conference calls at least monthly to discuss investment holdings and any potential changes to the model portfolios. We don’t leave this responsibility to others; we all serve on the investment committee and know exactly what we’re recommending and why.

The investment markets are a dynamic and frequently changing environment. We continuously monitor the markets and our managed client portfolios to make sure we’re maintaining an optimal portfolio composition and making timely adjustments as necessary. We offer detailed attention and customization that you won’t find at other firms.