INVESTORS CAN BENEFIT FROM NEW PORTFOLIOS RATING THE SOCIETAL IMPACT OF BONDS AND FIXED INCOME

Financial innovators HIP Investor and SNW Asset Management launch IMPACT-RATED FIXED-INCOME PORTFOLIOS for investors, advisers, and institutions

Portfolios Are Now Live With Founding Investor Allocating Capital

HIP Investor Inc. (HIP) and SNW Asset Management (a wholly owned subsidiary of Seattle-Northwest Securities Corp., or SNW) Inc. have built a business collaboration offering clients impact-rated portfolios for municipal bonds and fixed income.

DOWNLOAD THE HIP & SNW IMPACT RATED BOND OVERVIEW
(in PDF format)

This first-of-its-kind impact-rated bond portfolio, managed by SNW Asset Management and scored by HIP Investor, empowers investors to now see a quantified score of human, social and environmental impact realized by their investments. This new portfolio approach may also spur issuers of multi-million-dollar bonds toward more accountability and innovation as they seek to advance the well-being of their communities.

Investors have had few options to date: Standard and Poor’s, Moody’s and Fitch, all of whom earn revenue from the issuers of the bonds they rate, grade the financial outlook across a letter-based scale associated with estimated financial risk and repayment. To date, these three agencies’ ratings have not communicated publicly the societal or environmental impact of all the bonds they rate. SNW+HIP’s portfolio launch is pioneering in the muni-bond market to rate social and environmental results.

While investors seeking positive impact in their portfolios may be familiar with ratings on equities and stocks, including HIP Investor’s impact-ratings of 3,800 companies globally, there has not yet been a wide selection of quantifiable impact ratings available in the fixed income and bond markets.

Investment consultant Mercer’s coverage of more than 5,000 funds shows that the fixed-income category has the lowest percentage of portfolio strategies that integrate impact and sustainability factors (or ESG, environmental, social and governance), as you see in the chart below (source: Mercer)


The municipal bond market value in the U.S. is $3.7 trillion, according to the Municipal Securities Rulemaking Board. Most investors embrace muni’s as a source of tax-advantaged income and presumably high positive impact. Since the financial meltdown of 2008, investors have moved significant funds from equities to bonds and fixed income. Over the year ending August 31, 2012, investors have migrated to taxable bond funds increasing those funds by a net of $209 billion, and increased net funds to municipal bond funds by more than $50 billion, while investors withdrew a net of $117 billion from US Equities, according to Morningstar’s Direct Fund Flows report.

Issuers of muni bonds include 8 broad categories that cover a rich set of services for society:

  • Education: universities, public and private, from Occidental College to University of Texas; community colleges, such as San Bernardino, Calif.; and school districts teaching kindergarten to high school, including the San Diego unified school district.
  • Health care: systems, like Kaiser; as well as smaller regional facilities, like Bexar County, Texas.
  • Water and wastewater utilities, from Riverside, California, to New York.
  • Energy utilities, from renewable wind farms from Southern California Public Power Association (SCPPA), to Jacksonville Electric in Florida.
  • Cities, counties and states: including New York, Los Angeles County and Washington State.
  • Transportation, ports and airports: including Dallas-Fort Worth Airport, San Francisco (SFO) Airport and the Port of Seattle.
  • US Treasuries: T-bills, T-Notes and T-bonds, all issued by the U.S. Government, the historical harbinger of the so-called “risk-free” rate; and
  • Agency debt: loans backed by World Bank and US AID (such as to Tunisia); as well as Federal Home Loan Mortgage Corp. (Freddie Mac) and Federal National Mortgage Association (Fannie Mae).

The new impact-rated fixed income portfolios from SNW Asset Management, applies HIP Investor’s systematic approach that quantifies the human, social and environmental results of each muni bond – and connects those results to financial performance and stability. This unique combination allows investors to examine both the impact as well as the financial performance of their fixed-income portfolio.

“Impact-rated portfolios are consistent with smart investing principles that consider risks as well as performance,” said SNW Asset Management Managing Director Eddie Bernhardt. “Our fundamental credit analysis seeks to reduce the risk of defaults and aims to maximize returns for our clients. The HIP Scores aim to increase the likelihood that investors will get what they pay for, and why the tax-advantaged nature of munis was established by the government — a clearer picture of actual benefit to society.”

“Investors seeking impact as well as income can now understand how their portfolio can build a better world while seeking consistent yield and lower principal risk,” said HIP Investor’s CEO R. Paul Herman. “SNW Asset Management’s leadership in credit evaluation and bond selection for investors, combined with HIP’s scoring of impact across the categories of Health, Wealth, Earth, Equality and Trust, provides a new unmatched method of measuring benefit to society through your own investment portfolio.”

To learn more about how you can add a HIP+SNW’s impact-rated fixed-income portfolio to your investing, please contact one of the representatives below. OR

DOWNLOAD THE HIP & SNW IMPACT RATED BOND OVERVIEW
(in PDF format)

ABOUT SNW SECURITIES INC.

ABOUT SNW (Seattle-Northwest Securities Corporation): SNW Asset Management, LLC is a federally registered investment advisor providing taxable and tax-exempt fixed income portfolio management. SNW Asset Management’s clients include high net worth individuals, municipalities, corporations, foundations and registered investment advisors. SNW Asset Management is a wholly-owned subsidiary of Seattle-Northwest Securities Corporation, an employee-owned firm broker-dealer focused on the fixed income markets for over 40 years. More information about SNW is available at www.snwam.com SNW Securities is a member of FINRA (http://www.finra.org/) and SIPC (http://www.sipc.org/)

ABOUT HIP INVESTOR INC

HIP Investor Inc., founded in 2006, is a state-registered investment adviser, wealth manager, and portfolio manager of the HIP Indexes and Portfolios. HIP analyzes more than 4,000 companies and organizations globally to calculate and produce HIP Scores, ratings and rankings. HIP serves institutions, individuals, families, foundations, as well as their advisers and brokers, with a quantifiable, results-focused system that values human, social and environmental impact — and its relationship to financial performance and stability. To learn more about HIP’s ratings for your investments, HIP Portfolios, and The HIP Investor book (published by John Wiley & Sons [2010] and integrated into 12 university and MBA curricula), go to http://www.HIPinvestor.com/.

ABOUT IMPACT-RATED PORTFOLIOS

To see how you can add a HIP+SNW’s impact-rated fixed-income portfolio to your investing, please reach out to SNW AM or HIP Investor

SNW Contact:                                    HIP Contact:

Eddie Bernhardt, Pres. & CEO        R. Paul Herman, CEO

SNW Asset Management                 HIP Investor Inc.

Direct: +1-503-425-8037                   Direct: +1-415-902-7741

EBerhnardt@SNWam.com                Paul@HIPinvestor.com

http://www.SNWam.com                  http://www.HIPinvestor.com

DISCLOSURE and DISCLAIMER: This is not an offer of securities. SNW is an SEC-registered investment adviser and broker-dealer. HIP Investor is a state-registered investment adviser in California, Washington and Illinois, serving clients in additional states. Past performance is not indicative of future results. All investing risks loss of principal. Always check with your investment, legal and tax professionals about your portfolio decisions.

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