Advertisement
investing

A Bond Fund for the Socially Conscious

TIAA-CREF Social Choice Bond applies social screens to its picks and leaps to the top of the pack.

You’ve probably heard of socially screened stock funds. But bond funds that filter for good corporate citizenship? They’re much rarer in the world of what is commonly called socially responsible investing.

Social screens have hardly hindered TIAA-CREF Social Choice Bond (TSBRX), the top medium-maturity taxable bond fund over the past year. The fund invests mainly in high-grade debt, although it has 10% of its assets in junk bonds. As for social screens, managers Steve Liberatore and Joe Higgins look for bonds issued by firms that lead their industries in environmental awareness, corporate governance, and such things as product safety and treatment of employees. They also allocate a chunk of the portfolio, nearly 25% at last report, to “proactive social investments”—bonds or issuers that fund initiatives to address social issues such as public housing and climate change. The fund’s flexible approach allows the managers to get broad exposure to the market. With bond investing, says Liberatore, “you don’t get paid for picking winners. You get paid for avoiding losers.”

Advertisement - Article continues below

The managers did pick a winner, in a way. Because of what Liberatore calls their “less than sanguine” view of the U.S. economy, they ratcheted up the fund’s interest-rate sensitivity by adding more long-maturity, high-quality bonds, including Treasuries. That gave the fund an extra boost relative to its peers as bond yields plunged over the past 13 months.

K4_FUNDTRENDS.indd
K4_FUNDTRENDS.indd

Thinkstock

Advertisement

Most Popular

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)
tax deadline

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)

Between due dates for IRA or HSA contributions, paying estimated taxes and other deadlines, there's more to do by July 15 than just filing your federa…
July 10, 2020
65 Best Dividend Stocks You Can Count On
stocks

65 Best Dividend Stocks You Can Count On

These 65 Dividend Aristocrats are an elite group of dividend stocks that have reliably increased their annual payouts every year for at least a quarte…
July 8, 2020
Know Why Your Credit Score Changes: 9 Money Moves to Consider
credit & debt

Know Why Your Credit Score Changes: 9 Money Moves to Consider

Your credit score is a key indicator of your financial well-being and of the risk you pose to lenders. How good is yours?
July 10, 2020

Recommended

13 Best Vanguard Funds for the Next Bull Market
mutual funds

13 Best Vanguard Funds for the Next Bull Market

Optimistic that the bounce since March is indeed the start of the next bull market? Here are the 13 best Vanguard funds to help you make the most of i…
July 7, 2020
15 Best Fidelity Funds for the Next Bull Market
mutual funds

15 Best Fidelity Funds for the Next Bull Market

Investors looking to squeeze more profit from the next bull run can look to Fidelity funds for strong active management and tactical investments.
July 7, 2020
10 Stocks to Invest in the Health Care Revolution
healthcare stocks

10 Stocks to Invest in the Health Care Revolution

These companies are fighting disease and improving our standard of care.
July 2, 2020
Cash In With This Gaming ETF
Technology

Cash In With This Gaming ETF

Cash in on the video gaming craze with this fund.
July 1, 2020