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Mellon: Fixed Income Portfolio

Type: Aligned Investments

Topic: Buildings & Housing, Energy Efficiency, Renewable Energy

Status: Current

Burning coal is a major contributor to climate change, which in turn, presents material long-term risks to our economy and to McKnight’s endowment.

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Investment

$189 million bond portfolio; coal free originated in 2016

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Rationale

Given that McKnight made over $160 million in grants to organizations advancing a low-carbon future since 1992, long-term bond exposure to coal was an area of misalignment between our philanthropic goals and our endowment. This broad fixed income portfolio investing in government, corporate & mortgage-backed securities is now coal-free.

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Benchmark

Blended fixed income benchmark; Meets its benchmark

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Returns

Coal-free portfolio meets its benchmark, portfolios of $189 million as of Q3 2017

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Lessons Learned

Abundant Choices: McKnight’s fund manager Mellon was a helpful partner in scrubbing coal from our portfolio. This portfolio screens out pure-play coal as well as mining and other companies with underground coal reserves. The fund manager only had to sell 8 bonds valued at $1.6 million from the 1,500-bond portfolio.

Coal-Dependent Communities: Our impact investing program has exciting opportunities to invest in clean energy, and it’s also essential to support coal dependent communities that are reinventing their economies.

Disclaimer of Endorsement: The McKnight Foundation does not endorse or recommend any commercial products, processes, or service providers.

Last updated 3/2020

English (Canada)