Investment Process
While Calvert manages all fixed income portfolios in house, Calvert's Equities Department teams with world-class institutional money managers to manage our equity portfolios. Calvert only selects experienced managers who demonstrate a consistent and proven investment process and who have a strong track record and investment team.
Equities Investment Process:
In today's rapidly changing global economy, Calvert believes that companies that proactively manage social and environmental issues will be best positioned to outperform over the long term.
In evaluating prospective investments for our funds, Calvert employs two layers of analysis, which we refer to as our Double Diligence research process. Companies initially are qualified through in-depth financial analysis by our portfolio managers. As our portfolio managers identify financially attractive opportunities, Calvert's social investment research analysts perform an additional review to examine their social and environmental records. If a company fails to meet any of Calvert's basic social criteria, it is ineligible for investment. If a company satisfies the Fund's criteria but demonstrates room for improvement, we may invest in it and raise our concern in a dialogue with company management.
Ultimately, our portfolio managers will invest only in those companies that have met both our rigourous financial and social criteria.
Calvert Social Research examines company policies, programs and performance in seven broad areas:
- Governance and Ethics
- Workplace
- Environment
- Product Safety and Impact
- International Operations and Human Rights
- Indigenous Peoples' Rights
- Community Relations
Fixed Income Investment Process:
Our Nationally Recognized In-house Investment Team
Calvert Asset Management Company, Inc. (CAMCO) has managed a full family of fixed income portfolios for Calvert's individual and institutional clients since 1981.
This nationally recognized investment team integrates economic and fundamental analysis techniques to select securities with strong relative valuations. Through their time-tested and award-winning approach, CAMCO seeks to uncover often overlooked investment opportunities.
An active trading style has always been a key strength of CAMCO's management strategy, with an investment process that draws on an extensive knowledge of markets and dealers. The CAMCO team continually monitors changing yield spreads and the multitude of new issues coming to market. They maintain a strong relationship with a network of Wall Street dealers that enables them to take early advantage of new issues and other market opportunities.
The FourSight Process
All of our fixed income strategies employ a four-tiered process called FourSight. A culmination of Calvert's 30 years of income management experience and proven through a variety of market conditions, FourSight integrates four primary management components into a fluid, cohesive process.
- Manage duration. We strategically manage the portfolio's interest rate sensitivity by selecting securities having the proper mix of duration. (Duration is a measure of a bond's or a bond fund's sensitivity to interest rates. The longer the duration, the greater the price change relative to interest rate movements.)
- Monitor the yield curve. The yield curve can be managed through the maturities of the selected bonds. We have developed specific trading strategies based on the ever-changing shape of the yield curve.
- Optimize sector allocation. We choose specific sectors by examining both market conditions and relative value of each sector in the bond market.
- Analyze credit quality. Our analysts apply rigorous fundamental credit analysis to screen and select securities they believe will enhance overall portfolio performance.
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