Calvert News & Commentary

Calvert Global Water Fund (CFWAX) Highlighted in the May Issue of Wealth Management Online


Calvert Global Water Fund was named in an article by Wealth Management as one of the funds that specializes in the strong green field and that have been delivering solid returns. It was also one of three funds listed as steady performers. Learn more about the Fund and see its average annual total returns.

The article says that many green funds have fizzled lately, but points out that there is growing interest in water-related businesses, including providers of smart power meters, wastewater treatment, and energy efficient pumps. It also says that these companies will enjoy increasing demand as businesses struggle to cut energy costs and develop new sources of water. See excerpts from the article below.

Strongest Green Performers

Water stocks ranked among the strongest green performers of recent years. As water shortages mount around the globe, companies and governments are spending more on desalination and wastewater treatment. Water utilities are investing heavily in infrastructure and testing equipment. Rising earnings in the sector have boosted Calvert Global Water Fund, which holds a mix of utilities and infrastructure companies. As markets became volatile in 2011, portfolio manager Matt Sheldon emphasized regulated utilities, which sell water to municipalities and commercial customers. The utilities tend to generate consistent revenues and steady dividends. The shift to utilities helped the fund as nervous investors sought safer investments. By 2012, utilities companies had become overvalued, says Sheldon. “We started selling the utilities and moving to riskier infrastructure stocks,” he says.

The Fund now has half its assets in infrastructure stocks, including companies that provide pipes and services. One Fund holding is Danaher, which makes equipment that is used to test water quality. Sheldon says that his portfolio trades at a forward price-earnings multiple of 16. That is a premium to the market. But he figures that the stocks are worth the extra price because their earnings should grow at rates in the mid-teen percentages over the next two years.

As of May 31, 2013, Danaher represented 2.61% of Calvert Global Water Fund.

Please read the full article, "Many Green Funds Stay in the Black," by Wealth Management.

The Calvert Global Water Fund is subject to the risk that stocks that comprise the water-related resource sector may fall in value. A downturn in the water-related resource sector would impact the Fund more than a fund that does not concentrate in this industry, and the Fund therefore may be more volatile than a typical mutual fund. Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations. The Fund is non-diversified and may invest more of its assets in a smaller number of issuers than a diversified fund; therefore, gains or losses on a single investment may have greater impact on the Fund.

The water industry can be significantly affected by a number of factors, including availability of water, the level of rainfall, water consumption, price and supply fluctuations, and government regulations and policies. The water sector can be volatile. Investment involves risk, including possible loss of principal.

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