Sustainable Portfolios Performance Summary: April 2017

Late Month Rally Helps Stocks Achieve 1.03% Gain; Bonds Add 0.77%

A rally late in the month helped stocks achieve a gain of 1.03%, the third best monthly result since the start of the year and an improvement relative to the previous month’s 0.12% increase. The upward change pushed year-to-date results for the S&P 500 to 7.2%.  Positive first quarter earnings momentum and relief, as centrist outsider candidate Emmanuel Macron made it through the second round of presidential balloting in France, offset waning confidence in the U.S. that the new Trump administration would be able to execute on it stimulus plans.

Data showing that the U.S. economy had expanded at its slowest pace in 3-years combined with reduced inflation expectations contributed to falling Treasury yields and a flattening of the yield curve in April. 10-year Treasury yields declined from 2.39% to 2.28%, or 0.11%, while the Bloomberg Barclays U.S. Aggregate Bond Index added 0.77% to elevate year-to-date results to 1.6%.

Elsewhere, while emerging market stocks continued their outperformance relative to their developed markets counterparts on a year-to-date basis, the MSCI Emerging Markets Index fell back in April with a gain of 2.2% which was eclipsed by the 2.5% gain recorded by the MSCI EAFE Index covering developing countries.

Sustainable Portfolios Performance Summary

The Aggressive Sustainable Portfolio (95% stocks/5% bonds) gained 1.10% during the month of April, bolstered by the 1.11% increase delivered by the Vanguard FTSE Social Index Fund-Investor Shares. As has been the case during the each of the previous three months, the Fund again outperformed the S&P 500—this time by the slightest margin of 0.8%.  The Moderate and Conservative Portfolios also experienced gains, edging up 1.00% and 0.84%, respectively.  The TIAA-CREF Social Choice Bond Fund-Retail also extended its positive streak with a gain of 0.72% which slightly lagged the performance of the Bloomberg Barclays U.S. Aggregate Bond Index.

On a cumulative basis, the three portfolios are up 91.46%, 62.63% and 29.69%, respectively, well ahead of their corresponding indexes that delivered increases of 78.72%, 53.07% and 23.75%, respectively.

Monthly Sustainable Fund Flows

Sustainable funds, including both mutual funds, ETFs and ETNs, ended the month of April with $206.5 billion. This represents a month-over-month increase of $2.7 billion, for a gain of 1.3%. ETFs and ETNs stood at $5.2 billion as compared to $201.3 billion for mutual funds, or 97.5% of total sustainable assets.

Mutual funds accounted for 96% of the gain in net assets, driven almost entirely by an increase of $2.6 billion in the value of equity mutual funds that was largely aided by market appreciation.

Fixed income assets, consisting of taxable municipal bond funds along with money market mutual funds, ended the month of April largely unchanged at $17.2 billion in assets under management.