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Financial Planning > Charitable Giving > SRI Impact Investing

Eaton Vance to Buy SRI-Focused Calvert

By Janet Levaux

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In a move to stretch its operations into the world of socially responsible investing, fund-firm Eaton Vance (EV) said Friday that is plans to buy Calvert Investment Management for an undisclosed amount.

Calvert has about $12.3 billion of SRI funds and separate account assets under management, while Eaton Vance has some $343 billion in assets as of Sept. 30.

“As part of Eaton Vance, we see tremendous potential for Calvert to extend its leadership position among responsible investment managers,” said Thomas E. Faust Jr., chairman and CEO of Eaton Vance, in a statement. “By applying our management and distribution resources and oversight, we believe Eaton Vance can help Calvert become a meaningfully larger, better and more impactful company.”

SRI investments topped $6.5 trillion in 2014, according to SIF, a forum for sustainable and responsible investments, a 76% increase from the early-2012 level.

“As a result, assets managed with SRI strategies accounted for nearly 18% of all professionally managed assets in the United States at the start of 2014,” the group explained in its latest SRI study.

Founded in 1976, Calvert says it introduced the first mutual fund to oppose investing in South Africa’s apartheid system in 1982.

“I am extremely pleased that Eaton Vance has chosen to make Calvert the centerpiece of its expansion in responsible investing,” said Calvert President & CEO John Streur, in a statement.

Good for Advisors

According to the Morgan Stanley Institute for Sustainable Investing, “Investing in sustainability has usually met, and often exceeded, the performance of comparable traditional investments.”

Plus, “Sustainable equity mutual funds had equal or higher median returns and equal or lower volatility than traditional funds for 64% of the periods examined,” the Morgan Stanley report explained.

Offering clients funds with a SRI focus – or one based on environmental, social and governance (or ESG) concerns, serves advisors well in light of the new Department of Labor fiduciary rules, which go into effect in April 2017, according to one fund professional.

The DOL framework “puts the onus of fiduciary responsibility on wealth advisors, and it also made clear that considering ESG factors is part of that fiduciary responsibility,” explained Edward Kerschner, CFA, chief portfolio strategist with Columbia Threadneedle Investments, in a recent interview with ThinkAdvisor.

Advisors who do not consider ESG factors “might not be in the spirit, if not the letter, of the [DOL] requirements,” Kerschner added.

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Ed McCarthy contributed to this report.

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