Sentinel launches two do-good mutual funds

Vermont firm revamping lineup after acquisition of Citizens Funds

Apr 14, 2008 @ 12:01 am

By Sue Asci

Expanding into what some industry observers see as a significant growth area, Sentinel Asset Management Inc. last week launched two funds focused on socially conscious investing.

The funds mark the 75-year-old Montpelier, Vt., firm's first foray into the segment.

The Sentinel Sustainable Core Opportunities Fund (MYPVX) and Sentinel Sustainable Emerging Companies Fund (WAEGX) opened for investors April 7. The launch concluded two months of shareholder approvals as the company, which is owned by National Life Insurance Co., also of Montpelier, reorganized its funds following its acquisition of the assets of Citizens Advisers Inc. of Portsmouth, N.H., the adviser to the Citizens Funds.

"People are more actively involved in their funds and concerned about outsourcing, recycling, how employees are treated by companies," said Christian W. Thwaites, Sentinel's president and chief executive.

"A lot of the drive toward socially responsible investing is investor-driven. These funds were right up our alley," Mr. Thwaites said.

Industry research also suggests that socially conscious investing is a growth area.

ASSET GROWTH

The Social Investment Forum in Washington recently released a report stating that assets in such funds have grown 18% since 2005 to $2.7 trillion.

Meanwhile, the overall universe of professionally managed assets in the United States have increased by less than 3% to $25.1 trillion, according to the report (InvestmentNews, March 10).

In acquiring Citizens earlier this year, Sentinel picked up eight socially conscious funds.

About half of the $800 million in acquired assets were merged into established Sentinel funds, and the remaining assets were put into the new funds. Sentinel has some $20 billion in assets under management.

The large-cap-blend Sentinel Sustainable Core Opportunities Fund is managed by the same team led by Daniel J. Manion, who manages Sentinel's flagship fund, the Common Stock Fund (SCNCX). The Sentinel Sustainable Emerging Companies Fund is a mid-cap-growth fund, managed by Paul Kandel, who heads the Sentinel Mid Cap Growth Fund (SNTNX).

Sentinel's approach to socially conscious investing involves the use of a range of qualitative screens, including ones that address environmental, social, governance, human rights and diversity issues.

"We look at a company from all sides," said Joanne Dowdell, who joined Sentinel from Citizens as senior vice president and director of corporate responsibility. "It's not just about eliminating companies; we are very interested in best-in-class performers."

This is not the first time Mr. Thwaites has led Sentinel in a new direction since taking the firm's helm in 2005. That year, he reduced the number of portfolios to nine, from 17, and acquired some $260 million in fund assets from Bram-well Capital Management Inc. of New York.

The following year, Sentinel acquired the funds of Synovus Investment Advisors Inc. of Columbus, Ga., which has $475 million in assets.

"We took out the edgier portfolios and took out the momentum growth base," Mr. Thwaites said. "We made some systematic changes. We reduced the amount of stocks that we cover. We set up some portfolio risk guidelines that really helped us in the last eight to nine months, limiting our exposure to certain sectors. We developed a house style."

PERFORMANCE MATTERS

Adding the new funds could be a good move to garner more assets, said Burton Greenwald, a Philadelphia, Pa.-based mutual fund consultant.

"This acquisition is a constructive move by a small fund group trying to differentiate itself in the marketplace," he said. "The new chief, Christian Thwaites, has done a lot of things," including the acquisition of Bramwell, "which has an excellent reputation in the business."

The funds will attract investors if they perform, Mr. Greenwald believes.

"The popularity of [socially conscious funds is] directly correlated to the performance rather than any sort of feeling about doing good in the world," he said. "Investors can do good by charitable investments."

Ivory Johnson, director of financial planning at Scarborough Capital Management Inc. of Annapolis, Md., agrees.

"People want to make money," said Mr. Johnson, whose firm oversees about $1 billion in assets. "If they don't have the performance, they're not going to have the investors."

E-mail Sue Asci at sasci@investmentnews.com.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

How InvestmentNews picks its Women to Watch winners

The process is laborious and exacting, but well worth it. The end result each year is an impressive group of women in the advice industry from whom others can draw inspiration.

Latest news & opinion

Some good news about female recruitment in financial advice

Each of four core advisory positions tracked in InvestmentNews' benchmarking study has seen an uptick in women entrants.

10 ETFs that are up more than 35% this year

Amid the stock market carnage, there are still some funds posting big gains.

10 biggest HSA providers rated

Morningstar rated the largest plan providers as investment and spending vehicles.

Morningstar: DOL fiduciary rule reduces inflows to mutual funds with high loads

With the measure's demise, will the SEC's advice reform sustain the momentum?

6 tax strategies for year-end planning

How to help clients maximize their wealth using specific tax strategies before the end of the year.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print