As we enter the holiday season, you might be looking for ways to give back to others.
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.”
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 close to 3,000 stocks in 50 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 eight out of the past 11 years – or 73% of the time. And it’s outperforming in 2021, too.
ETF.com lists 170 ESG-related ETFs. 24 of them have over $1 billion in assets. So it’s clear there’s an investment appetite for doing good with your money.
Today, I’ll show you how you can potentially earn up to 6x times the interest you’d receive on conventional savings vehicles by investing in causes near and dear to your heart…
Invest for High Impact
Calvert Impact Capital’s Community Investment Note is a chance to earn a return while supporting causes you care about.
Justin Conway, Calvert Impact Capital’s vice president of investment partnerships, told me 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 sectors like affordable housing, microfinance, renewable energy, and more. For example, Calvert Impact Capital’s partners have helped:
- Create or preserve 36,700 homes.
- Reduce 30.7 million metric tons of CO2.
- Create or retain 486,357 small business jobs.
- Generate 3 million MWh of clean energy from solar, wind, and other renewable sources.
- Finance 3,806 schools and educational institutions.
- Reduce 121,001 tons of waste.
- Support 419,551 smallholder farmers.
And these investments are actually bearing fruit…
For instance, Calvert Impact Capital lends to groups like Azure, an organization that provides water services to urban and rural populations in El Salvador, where more than 40% of the population lacks reliable access to piped water in their homes.
To date, Azure’s services have benefitted 63,000-plus families in the country. And they are also working to replicate efforts in other countries that lack reliable access to clean water.
Calvert Impact Capital has raised over $3 billion from 19,000 investors 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 2021:
You might think these returns look low. But all four options have much higher rates – and as much as 6x greater – than traditional income-producing assets like certificates of deposit (CDs) and Treasurys.
For instance, if you put $10,000 in a 5-year CD, at the national average rate, you’d make $27 in income per year. That’s a grand total of $135 over 5 years.
But if you put $10,000 in Calvert’s 5-year note, you’d make $150 in income per year. That’s a grand total $750 over 5 years.
So by investing in a good cause, you’d make 456% more in income.
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