Green Century Funds
Balanced
Fund
Individual
Investor Class: GCBLX
Institutional
Class: GCBUX
Equity
Fund
Individual
Investor Class: GCEQX
Institutional
Class: GCEUX
MSCI
International
Index Fund
Individual
Investor Class: GCINX
Institutional
Class: GCIFX
As
with all mutual funds, the Securities and Exchange Commission has not approved
or disapproved these securities or passed upon the adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
Green
Century Capital Management, Inc. (Green Century Capital Management or Green
Century) is the investment adviser to the Green Century Funds (the
Funds.)
TABLE OF CONTENTS
Investment Objective
The
Green Century Balanced Fund seeks capital growth and income from a diversified
portfolio of stocks and bonds which meet Green Century’s standards for corporate
environmental responsibility.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. You may pay other fees, such
as brokerage commissions and other fees to financial intermediaries, which are
not reflected in the tables and examples below. If you invest in shares
of the Fund through an investment professional or financial intermediary, that
investment professional or financial intermediary may charge you a commission in
an amount determined and separately disclosed to you by that investment
professional or financial intermediary.
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Individual Investor Class |
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Institutional Class |
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Shareholder Fees
(fees paid directly from your
investment) |
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Maximum
Sales Charge (Load) Imposed on Purchases |
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None |
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None |
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Maximum
Deferred Sales Charge (Load) |
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None |
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None |
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Redemption
Fee (as a percentage of an amount redeemed within 60 days of
purchase) |
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2.00% |
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2.00% |
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Wire
Redemption Fee/Overnight Delivery Fee (if such services
are requested) |
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$10/$30 |
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$10/$30 |
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Annual Fund
Operating Expenses (expenses that you pay each year as a percentage
of the value of your investment) |
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Management
Fees |
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0.63% |
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0.63% |
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Distribution
(12b-1) Fees |
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None |
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None |
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Other
Expenses: |
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Administrative
Fees |
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0.83% |
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0.53% |
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Other
Fees |
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None |
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None |
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Total Annual Fund
Operating Expenses |
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1.46% |
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1.16% |
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Example
This
example is intended to help you compare the costs of investing in the Fund with
the cost of investing in other mutual funds. This example assumes that: (1) you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods; (2) your investment has a 5%
1
return
each year; and (3) the Fund’s operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions, your costs
would be:
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1 Year |
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3 Years |
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5 Years |
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10 Years |
Individual Investor Class |
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$149 |
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$462 |
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$797 |
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$1,746 |
Institutional Class |
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$118 |
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$368 |
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$638 |
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$1,409 |
Portfolio Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
During the most recent fiscal year, the Fund’s portfolio turnover rate was
21% of the average value of its
portfolio.
Principal Investment
Strategies
The
Fund invests primarily in the stocks and bonds of U.S. companies that the Fund’s
Adviser, Green Century Capital Management (Green Century), believes are
environmentally responsible and sustainable. The Fund seeks to avoid investing
in securities of issuers in industries that Green Century believes are
environmentally dangerous. There is no predetermined percentage of assets
allocated to either stocks or bonds, although the Fund will generally invest at
least 25% of its net assets in bonds and may not invest more than 75% of its net
assets in stocks.
Green
Century applies rigorous selection criteria to identify such companies, that it
believes are environmentally responsible and sustainable, which may include, but
are not limited to, those that:
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Demonstrate
a commitment to preserving and enhancing the environment as evidenced by
the products they make and the services they provide;
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Make
positive contributions toward actively promoting a healthier environmental
future, including companies that produce renewable energy products, help
conserve water, promote sustainable agriculture, and those that offer
effective remedies for existing environmental problems;
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Strive
to openly disclose their policies and performance on critical
environmental criteria;
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Respond
positively to shareholder advocacy on environmental, social and governance
(ESG) issues. |
The
Fund also seeks to work with the companies in which it invests to adopt stronger
environmental policies for their operations and supply chains.
Green
Century believes that companies that are environmentally responsible and
sustainable may enjoy competitive advantages from cost reductions, quality
improvements, profitability enhancements and access to expanding and new growth
markets. Further, Green Century believes that companies that are responsible
towards the environment are more likely to act ethically and maintain the trust
of their shareholders.
Green
Century believes that environmentally dangerous industries impose harmful costs
on society and the planet and seeks to provide an opportunity to invest in a way
that avoids them; thus at various times the
2
Fund
may not be invested in certain companies and industries Green Century believes
threaten a sustainable global environment and public health. The Balanced Fund
does not intend to invest in companies that primarily:
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Explore
for, extract, produce, manufacture or refine coal, oil or gas or produce
or transmit electricity derived from fossil fuels or transmit natural gas
or have material carbon reserves;
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Are
engaged in the production of nuclear energy or the manufacture of nuclear
equipment to produce nuclear energy or nuclear weapons, in the belief that
these products are unacceptably threatening to a sustainable global
environment; |
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Are
engaged in the manufacture of tobacco products, which are linked to air
pollution, deforestation, and plastic pollution, as well as health
problems; |
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Serve
as factory farms, which pollute our drinking water and overuse medically
important antibiotics;
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Are
involved in genetically modified organisms (GMOs) whose use has led to
increased use of toxic herbicides;
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Produce
firearms or military weapons; or
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Are
engaged in gambling and alcohol.
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The
Fund may invest in growth and value stocks of any market capitalization. The
Fund may be more heavily weighted in growth stocks. The Fund’s Subadviser uses
quantitative measurements in combination with in-house and third-party research
to analyze the stocks of companies identified using Green Century’s
environmental criteria, and the Subadviser’s own proprietary ESG integrated
investment process, and includes in the Fund’s portfolio those companies that
appear to possess superior earnings growth prospects and whose stock prices, in
the Subadviser’s opinion, do not accurately reflect the companies’ value. The
Subadviser’s in-house research consists of an internally generated analysis
using its proprietary investment process. Third-party information providers for
both financial and ESG data currently include Bloomberg, L.P., MSCI Inc. and
FactSet. The Subadviser may sell a stock in the Fund’s portfolio, if, among
other reasons, the company no longer meets the Fund’s environmental standards or
the stock no longer meets the Fund’s investment criteria or becomes overvalued
relative to the long-term expectation for its stock price.
The
Subadviser’s ESG-integrated investment process includes both industry
benchmarking and in-depth company analyses that covers both quantitative and
qualitative considerations. The Subadviser’s industry benchmarking evaluation
uses ESG data weighted according to specific factors deemed by the Subadviser to
have the most financial impact for the industry. The Subadviser’s ESG analysis
evaluates the scope and integrity of a company’s products, policies, and
practices related to ESG issues. The ESG criteria reviewed by the Subadviser
reflect a variety of key sustainability issues that can influence company risks
and opportunities. The ESG criteria implemented by the Subadviser may differ
between industries.
The
bonds the Fund invests in may be of any maturity. While the Fund’s fixed income
investments will be primarily invested in investment grade bonds, the Fund may
invest up to 35% of its net assets in high yield, below investment grade bonds,
commonly known as “junk bonds.” The Fund’s fixed income investments consist
primarily of corporate bonds, U.S. Government securities, securities issued by
supra-national or foreign domiciled entities, municipal securities, and
mortgage-related securities, and may include bonds also determined to be “green”
by the Subadviser based on the use of proceeds supporting climate change
mitigation and adaptation, among other environmental goals.
3
In
general, fixed income securities are included in the Fund’s portfolio to balance
or offset risks associated with the Fund’s investment in stocks. Fixed income
investments are evaluated using the Fund’s environmental
criteria. Issuer-specific financial evaluation of fixed income investments
focuses on an issuer’s cash flow, interest rate coverage, and other measures of
its ability to meet its future income and principal repayment commitments. In
addition, each fixed income investment is evaluated with respect to its credit
quality and its overall exposure to interest rate risk.
The
Fund may invest up to 30% of its assets in equity and debt securities of
non-U.S. issuers.
Principal Risks
You may lose
money by investing in the Fund. As with any mutual fund, there
can be no guarantee that the Fund will achieve its objective. The following is a
summary description of certain risks of investing in the Fund:
Market Risk. The market prices of securities,
or other assets held by the Fund may fall, sometimes rapidly or unpredictably,
due to general market conditions, such as real or perceived adverse economic or
political conditions, political instability, recessions, inflation, changes in
interest or currency rates, lack of liquidity in the bond markets, the spread of
infectious illness or other public health issues, weather or climate events,
armed conflict, market disruptions caused by tariffs, trade disputes, sanctions
or other government actions, or other factors or adverse investor sentiment. If
the market prices of the Fund’s securities and assets fall, the value of your
investment will go down. A change in financial condition or other event
affecting a single issuer or market may adversely impact securities markets as a
whole.
Changes
in market conditions will not typically have the same impact on all types of
securities. The market prices of securities may fall due to factors affecting a
particular issuer, industry or the securities market as a whole. In the past
decade, financial markets throughout the world have experienced increased
volatility, depressed valuations, decreased liquidity and heightened
uncertainty. Governmental and non‑ governmental issuers have defaulted on, or
been forced to restructure, their debts. These conditions may continue, recur,
worsen or spread. Events that have contributed to these market conditions
include, but are not limited to major cybersecurity events; geopolitical events
(including wars, terror attacks and economic sanctions); measures to address
budget deficits; downgrading of sovereign debt; changes in oil and commodity
prices; dramatic changes in currency exchange rates; global pandemics; and
public sentiment.
The
long-term impact of the COVID-19 pandemic and its subsequent variants on
economies, markets, industries and individual issuers, are not known. Some
sectors of the economy and individual issuers have experienced or may experience
particularly large losses. Periods of extreme volatility in the financial
markets, reduced liquidity of many instruments, increased government debt,
inflation, and disruptions to supply chains, consumer demand and employee
availability, may continue for some time.
Raising
the ceiling on U.S. government debt has become increasingly politicized. Any
failure to increase the total amount that the U.S. government is authorized to
borrow could lead to a default on U.S. government obligations, with
unpredictable consequences for economies and markets in the U.S. and elsewhere.
Inflation and interest rates have increased and may rise further. These
circumstances could adversely affect the value and liquidity of the Fund’s
investments, impair the Fund’s ability to satisfy redemption requests, and
negatively impact the Fund’s performance.
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Following
Russia’s invasion of Ukraine, Russian securities have lost all, or nearly all,
their market value. Other securities or markets could be similarly affected by
past or future political, geopolitical or other events or conditions.
Governments
and central banks, including the U.S. Federal Reserve, have taken extraordinary
and unprecedented actions to support local and global economies and the
financial markets. These actions have resulted in significant expansion of
public debt, including in the U.S. The consequences of high public debt,
including its future impact on the economy and securities markets, may not be
known for some time. U.S. Federal Reserve or other U.S. or non‑U.S. governmental
or central bank actions, including increases or decreases in interest rates, or
contrary actions by different governments could negatively affect financial
markets generally, increase market volatility and reduce the value and liquidity
of securities in which the Fund invests. Policy and legislative changes in the
United States and in other countries are affecting many aspects of financial
regulation and these and other events affecting global markets, such as the
United Kingdom’s exit from the European Union (or Brexit), potential trade
imbalances with China or other countries, or sanctions or other government
actions against Russia, other nations or individuals or companies (or their
countermeasures), may in some instances contribute to decreased liquidity and
increased volatility in the financial markets. The impact of these changes on
the markets, and the implications for market participants, may not be fully
known for some time.
The
U.S. and other countries are periodically involved in disputes over trade and
other matters, which may result in tariffs, investment restrictions and adverse
impacts on affected companies and securities. For example, the U.S. has imposed
tariffs and other trade barriers on Chinese exports, has restricted sales of
certain categories of goods to China, and has established barriers to
investments in China. Trade disputes may adversely affect the economies of the
U.S. and its trading partners, as well as companies directly or indirectly
affected and financial markets generally. The U.S. government has prohibited
U.S. persons, such as the Fund, from investing in Chinese companies designated
as related to the Chinese military. These and possible future restrictions could
limit the Fund’s opportunities for investment and require the sale of securities
at a loss or make them illiquid. Moreover, the Chinese government is involved in
a longstanding dispute with Taiwan that has included threats of invasion. If the
political climate between the U.S. and China does not improve or continues to
deteriorate, if China were to attempt unification of Taiwan by force, or if
other geopolitical conflicts develop or get worse, economies, markets and
individual securities may be severely affected both regionally and globally, and
the value of the Fund’s assets may go down.
Economies
and financial markets throughout the world are increasingly interconnected.
Economic, financial or political events, trading and tariff arrangements, armed
conflict including Russia’s military invasion of Ukraine, terrorism, natural
disasters, infectious illness or other public health issues, cybersecurity
events, supply chain disruptions, sanctions against Russia, other nations or
individuals or companies and possible countermeasures, and other circumstances
in one country or region could have profound impacts on other countries or
regions and on global economies or markets. As a result, whether or not the Fund
invests in securities of issuers located in or with significant exposure to the
countries or regions directly affected, the value and liquidity of the Fund’s
investments may be negatively affected.
Environmentally Responsible Investing
Risk. The Fund’s environmental criteria limit the available investments
compared with funds with no such criteria. Under certain economic conditions,
this could
5
cause
the Fund’s investment performance to be worse or better than similar funds with
no such criteria. The Subadviser may use third party ESG ratings information
that it believes to be reliable, but such information may not be accurate or
complete, or may be biased.
Portfolio Selection
Risk. The Subadviser’s judgment about a particular
security or issuer, or about the economy or a particular sector, region, market
segment or industry, or about an investment strategy, may prove to be incorrect
or may not produce the desired results, or there may be imperfections, errors or
limitations in the models, tools and information used by the Subadviser.
Equity Securities
Risk. The Fund is heavily invested in stocks. Like
all funds invested in stocks, the Fund’s share price will fluctuate daily
depending on the performance of the companies that comprise the Fund’s
investments, the general market and the economy overall. After you invest, the
value of your shares may be less than what you paid for them.
Small- and Mid‑Cap Companies
Risk. The Fund may be invested in small- and
mid‑cap companies which involve greater risk than investing in the stocks of
larger, more established companies. Small- and mid‑cap companies may lack the
management experience, financial resources and product diversification of large
companies and the frequency and volume of their trading may be less than that of
larger companies. Therefore, securities of small- and mid‑cap companies may be
subject to wider and more erratic price fluctuations. Compared to large‑cap
companies, small‑cap and mid‑cap companies, and the market for their equity
securities, may be more sensitive to changes in earnings results and investor
expectations or poor economic or market conditions, including those experienced
during a recession, experience sharper swings in market values, have limited
liquidity, be harder to value or to sell at the times and prices the Subadviser
thinks appropriate, and offer greater potential for gain and loss.
Interest Rate Risk. The
market prices of the Fund’s fixed income securities may fluctuate significantly
when interest rates change. When interest rates rise, the value of fixed income
securities, and therefore the value of your investment in the Fund, generally
goes down. A rise in rates tends to have a greater impact on the prices of
longer term or duration securities. In recent years interest rates and credit
spreads in the U.S. have been at historic lows. The U.S. Federal Reserve has
raised certain interest rates, and interest rates may continue to go up. A
general rise in interest rates could adversely affect the price and liquidity of
fixed income securities and could also result in increased redemptions from the
Fund. During periods of rising interest rates, the average life of certain types
of fixed income securities may be extended because of slower than expected
principal payments. This may lock in a below market interest rate, increase the
security’s duration (a measure of the underlying portfolio’s price sensitivity
to changes in prevailing interest rates) and reduce the value of the security.
The maturity of a security may be significantly longer than its effective
duration. A security’s maturity and other features may be more relevant than its
effective duration in determining the security’s sensitivity to other factors
affecting the issuer or markets generally, such as changes in credit quality or
in the yield premium that the market may establish for certain types of
securities (sometimes called “credit spread”). In general, the longer its
maturity the more a security may be susceptible to these factors. When the
credit spread for a fixed income security goes up or “widens,” the value of the
security will generally go down. When interest rates decline, investments made
by the Fund may pay a lower interest rate, which would reduce income received
and distributed by the Fund. Also, when interest rates go down, the Fund’s yield
will decline.
6
During
periods of declining interest rates, the issuer of a fixed income security (or
borrowers in a pool of loans) may prepay principal earlier than scheduled,
forcing the Fund to reinvest in lower yielding securities. The Fund also may
lose any premium it paid on the security.
Credit Risk. If an issuer or guarantor of a
fixed income security held by the Fund or a counterparty to a financial contract
with the Fund defaults on its obligation to pay principal and/or interest, has
its credit rating downgraded or is perceived to be less creditworthy, becomes
insolvent or files for bankruptcy, or the credit quality or value of any
underlying assets declines, the value of your investment will decline. Changes
in actual or perceived creditworthiness may occur quickly. The fund could be
delayed or hindered in its enforcement of rights against an issuer, guarantor or
counterparty.
LIBOR Risk. The Fund’s investments, payment
obligations and financing terms may be based on floating rates, such as LIBOR
(London Interbank Offered Rate) or Secured Overnight Financing Rate (SOFR). ICE
Benchmark Administration, the administrator of LIBOR, has ceased publication of
most LIBOR settings on a representative basis. Actions by regulators have
resulted in the establishment of alternative reference rates to LIBOR in most
major currencies. In the U.S., a common benchmark replacement is based on the
Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of
New York, including certain spread adjustments and benchmark replacement
conforming changes, although other benchmark replacements (with or without
spread adjustments) may be used in certain transactions. The impact of the
transition from LIBOR on a Fund’s transactions and financial markets generally
cannot yet be determined. The transition away from LIBOR may lead to increased
volatility and illiquidity in markets that have relied on LIBOR and may
adversely affect the Fund’s performance.
High Yield or “Junk” Bond Risk. Debt
securities that are below investment grade, “junk bonds,” are speculative, have
a higher risk of default or are already in default, tend to be less liquid and
are more difficult to value than higher grade securities. Junk bonds tend to be
volatile and more susceptible to adverse events and negative sentiments.
U.S. Government Agency Obligations
Risk. Government sponsored entities such as Federal National Mortgage
Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac)
and the Federal Home Loan Banks (FHLBs), although chartered or sponsored by
Congress, are not funded by congressional appropriations and the debt and
mortgage-backed securities issued by them are neither guaranteed nor issued by
the U.S. government. Although the U.S. government has provided financial support
to Fannie Mae and Freddie Mac in the past, there can be no assurance that it
will support these or other government sponsored entities in the future.
Municipal Securities Risk. The municipal bond
market can be susceptible to unusual volatility, particularly for lower-rated
and unrated securities. Liquidity can be reduced unpredictably in response to
overall economic conditions or credit tightening. Municipal issuers may be
adversely affected by rising health care costs, increasing unfunded pension
liabilities, and by the phasing out of federal programs providing financial
support. Unfavorable conditions and developments relating to projects financed
with municipal securities can result in lower revenues to issuers of municipal
securities, potentially resulting in defaults. Issuers often depend on revenues
from those projects to make principal and interest payments. The value of
municipal securities can also be adversely affected by changes in the financial
condition of one or more individual municipal issuers or insurers of municipal
issuers, regulatory and political developments, tax law
7
changes
or other legislative actions, and by uncertainties and public perceptions
concerning these and other factors. Municipal issuers may be more susceptible to
downgrades or defaults during recessions or similar periods of economic stress.
Financial difficulties of municipal issuers may continue or get worse,
particularly in the event of political, economic or market turmoil or a
recessions.
Mortgage-Related Securities Risk. The value of
mortgage-related securities will be influenced by factors affecting the assets
underlying such securities. As a result, during periods of declining asset
value, difficult or frozen credit markets, swings in interest rates, or
deteriorating economic conditions, mortgage-related securities may decline in
value, face valuation difficulties, become more volatile and/or become illiquid.
These securities are also subject to prepayment and call risk. Some of these
securities may receive little or no collateral protection from the underlying
assets and are thus subject to the risk of default. The risk of such defaults is
generally higher in the case of mortgage-backed investments issued by
non‑governmental issuers and those that include so‑called “sub‑prime” mortgages.
The structure of some of these securities may be complex and there may be less
available information than for other types of debt securities. Upon the
occurrence of certain triggering events or defaults, the Fund may become the
holder of underlying assets at a time when those assets may be difficult to sell
or may be sold only at a loss.
Risks of Non‑U.S. Investments. Investing in
non‑U.S. issuers or in securities of U.S. issuers with significant exposure to
foreign markets may involve unique risks compared to investing in securities of
U.S. issuers. These risks are more pronounced for issuers in emerging markets or
to the extent that the Fund invests significantly in one region or country.
These risks may include different financial reporting practices and regulatory
standards, less liquid trading markets, currency risks, changes in economic,
political, regulatory and social conditions, armed conflict including Russia’s
military invasion of Ukraine, and sanctions or other government actions against
Russia, other nations or individuals or companies (or their countermeasures),
sustained economic downturns, reduction of government or central bank support,
inadequate accounting standards, tariffs, tax dispute or other tax burdens,
weather or climate events, natural disasters, terrorism, nationalization or
expropriation of assets, arbitrary application of laws and regulations or lack
of rule of law, and investment and repatriation restrictions. Lack of
information and less market regulation also may affect the value of these
securities. Withholding and other non-U.S. taxes may decrease the Fund’s return.
Non-U.S. issuers may be located in parts of the world that have historically
been prone to natural disasters. Emerging market economies tend to be less
diversified than those of more developed countries. They typically have fewer
medical and economic resources than more developed countries and thus they may
be less able to control or mitigate the effects of a pandemic.
Market Sector Risk. The Fund may hold a large
percentage of securities in a single market sector. To the extent the Fund holds
a large percentage of securities in a single sector, its performance will be
tied closely to and affected by the performance of that sector, and the Fund
will be subject to a greater degree to any market price movements, regulatory or
technological change, economic conditions or other developments or risks
affecting such market sector than a fund without the same focus.
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Financial Sector Risk. Issuers in the
financial sector, such as banks, insurance companies and broker- dealers,
may be sensitive to changes in interest rates, credit rating downgrades,
decreased liquidity in credit markets, and general economic activity and
are generally subject to extensive government regulation.
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Technology Sector
Risk. Securities in the technology sector,
such as information technology, communications equipment, computer
hardware and software, and office and scientific equipment, are generally
subject to risks of rapidly evolving technology, short product lives,
rates of corporate expenditures, falling prices and profits, competition
from new market entrants, and general economic conditions. They are also
heavily dependent on intellectual property rights and may be adversely
affected by the loss or impairment of, or inability to enforce, those
rights. |
Liquidity
Risk. Liquidity risk exists when particular
investments are difficult to purchase or sell. When the Fund holds these types
of investments, the Fund’s portfolio may be more difficult to value, especially
during periods of market turmoil or due to adverse changes in the conditions of
a particular issuer. Markets may become illiquid when there are few, if any,
interested buyers or sellers or when dealers are unwilling or unable to make a
market for certain securities or when dealer market-making capacity is otherwise
reduced. During times of market turmoil, there have been, and may be, no buyers
for securities in entire asset classes, including U.S. Treasury securities. As a
general matter, dealers recently have been less willing to make markets for
fixed income securities. When the Fund holds illiquid investments, the Fund may
be harder to value, especially in changing markets. Investments by the Fund in
derivatives, below investment grade securities, foreign securities, and
corporate loans tend to involve greater liquidity risk. If the Fund is forced to
sell or unwind these investments to meet redemptions or for other cash needs or
try to limit losses, the Fund may suffer a substantial loss or may not be able
to sell at all. Additionally, the market for certain investments may become
illiquid under adverse market or economic conditions independent of any specific
adverse changes in the conditions of a particular issuer. In such cases, the
Fund, due to limitations on investments in illiquid securities and the
difficulty in purchasing and selling such securities, may be unable to achieve
its desired level of exposure to certain sectors. Further, certain securities,
once sold, may not settle for an extended period. The Fund will not receive its
sales proceeds until that time, which may constrain the Fund’s ability to meet
its obligations (including obligations to redeeming shareholders). Liquidity
risk may be magnified in an environment of rising interest rates or widening
credit spreads in which investor redemptions from fixed income funds may be
higher than normal.
Valuation Risk. A
significant percentage of the Fund’s securities are valued using a fair value
methodology. The sales price the Fund could receive for any particular portfolio
investment may differ from the Fund’s valuation of the investment, particularly
for securities that trade in thin or volatile markets. These differences may
increase significantly and affect Fund investments more broadly during periods
of market volatility. Investors who purchase or redeem Fund shares may receive
fewer or more shares or lower or higher redemption proceeds than they would have
received if the securities had not been fair-valued or if a different valuation
methodology had been used. The ability to value the Fund’s investments may be
impacted by technological issues and/or errors by pricing services or other
third party service providers.
Redemption Risk. The
Fund may experience periods of heavy redemptions that could cause the Fund to
liquidate its assets at inopportune times or at a loss or depressed value, or
accelerate taxable gains or transaction costs, particularly during periods of
declining or illiquid markets. Redemption risk is greater to the extent that the
Fund has investors with large shareholdings, short investment horizons, or
unpredictable cash flow needs. In addition, redemption risk is heightened during
periods of overall market turmoil. The redemption by one or more large
shareholders of their holdings in the Fund could hurt performance and/or cause
the remaining shareholders in the Fund to lose money. Further, if one decision
maker has control of
9
Fund
shares owned by separate Fund shareholders, including clients or affiliates of
the Fund’s Adviser, redemptions by these shareholders may further increase the
Fund’s redemption risk. If the Fund is forced to liquidate its assets under
unfavorable conditions or at inopportune times, the value of your investment
could decline.
Cybersecurity Risk. Cybersecurity failures by
or breaches of the Fund’s Adviser, Subadviser, transfer agent, distributor,
custodian, fund accounting agent or other service providers may disrupt Fund
operations, interfere with the Fund’s ability to calculate its NAV, prevent Fund
shareholders from purchasing, redeeming or exchanging shares or receiving
distributions or receiving timely information regarding the Fund or their
investment in the Fund, cause loss of or unauthorized access to private
shareholder information, and result in financial losses to the Fund and its
shareholders, regulatory fines, penalties, reputational damage, or additional
compliance costs. Substantial costs may be incurred in order to prevent any
cyber incidents in the future. The Fund and its shareholders could be negatively
impacted as a result. New ways to carry out cyber attacks continue to develop.
There is a chance that some risks have not been identified or prepared for, or
that an attack may not be detected, which puts limitations on the Fund’s ability
to plan for or respond to a cyber attack.
These
and other risks are discussed in more detail in “Additional Information About
the Funds’ Investment Objectives, Strategies and Risks” in this Prospectus and
in the Statement of Additional Information.
Performance
The bar chart and the average annual total return
table below provide some indication of the risks of investing in the Fund by
showing how the Fund has performed in the past. The bar chart shows changes in
the performance of the Individual Investor Class of the Fund from year to year.
The table shows how the average annual total returns of each class of the Fund
for 1, 5, 10 year periods and since inception compare with the returns of the
S&P 500 Index, a broad measure of market performance.
The
table also compares the performance of each class of the Fund to Custom Balanced
Index (the Custom Balanced Index is comprised of a 60% weighting in the S&P
1500 Index and a 40% weighting in the BofA Merrill Lynch 1-10 Year U.S.
Corporate & Government Index), and the Lipper Balanced Fund
Index.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how it will perform in the future. Updated performance
information is available on the Fund’s website, www.greencentury.com/fund-performance/,
or by calling 1-800-934-7336.
10
Annual Total Returns for
Years Ended December 31
During
the period shown, the Fund’s Individual Investor Class best quarterly
performance was 14.28%, for the quarter ended 6/30/20. The Fund’s Individual
Investor Class worst quarterly
performance was -12.74%, for the quarter ended
3/31/20.
As
of September 30, 2023, the
year-to-date
return for the Fund’s Individual Investor Class was
2.43%.
11
Average Annual Total
Returns For the Periods Ended December 31, 2022
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1 Year |
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5 Years |
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10 Years |
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Since Inception (March 18, 1992) |
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Green Century Balanced Fund – Individual
Investor Class |
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| |
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| |
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| |
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| |
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| |
Return
before taxes |
|
|
‑16.21 |
% |
|
|
6.00 |
% |
|
|
7.60 |
% |
|
|
6.78 |
% |
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| |
| |
|
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| |
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| |
|
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| |
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| |
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| |
Return
after taxes on distributions |
|
|
‑16.58 |
% |
|
|
5.33 |
% |
|
|
6.95 |
% |
|
|
5.96 |
% |
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| |
| |
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| |
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| |
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| |
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| |
Return
after taxes on distributions and sale of Fund shares |
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|
‑9.33 |
% |
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|
4.69 |
% |
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|
6.08 |
% |
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|
5.51 |
% |
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| |
| |
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| |
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| |
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| |
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Green Century Balanced Fund – Institutional
Class |
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Returns
before taxes |
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|
‑15.93 |
% |
|
|
6.14 |
% |
|
|
7.67 |
% |
|
|
6.81 |
% |
|
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| |
| |
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| |
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| |
|
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| |
|
|
| |
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| |
Custom
Balanced Index (reflects no deduction for fees, expenses or
taxes) |
|
|
‑13.70 |
% |
|
|
6.12 |
% |
|
|
8.04 |
% |
|
|
6.68 |
% |
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| |
| |
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| |
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| |
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| |
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| |
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| |
Lipper
Balanced Fund Index (reflects no deduction for fees, expenses or
taxes) |
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|
‑14.36 |
% |
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4.62 |
% |
|
|
6.66 |
% |
|
|
6.99 |
% |
|
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| |
| |
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| |
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| |
|
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| |
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| |
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| |
S&P
500 Index (reflects no deduction for fees, expenses or taxes) |
|
|
‑18.11 |
% |
|
|
9.42 |
% |
|
|
12.56 |
% |
|
|
9.70 |
% |
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| |
| |
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Institutional
Shares were offered as of November 28, 2020. The Institutional Class performance
prior to November 28, 2020 reflects the performance of the Fund’s Individual
Investor Class. The after-tax returns are shown for the Individual
Investor Class of the Fund and the after-tax returns for the Institutional Class
of the Fund will vary. The after-tax returns are calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s
tax situation and may differ from those shown. After-tax returns shown are not
relevant to investors who hold their Fund shares through tax-advantaged
arrangements, such as 401(k) plans or individual retirement
accounts. Returns after taxes on distributions and sale of
fund shares are higher than returns before taxes for certain periods shown
because they reflect the tax benefit of capital losses realized on the sale of
fund shares.
Management
Investment Adviser: Green Century Capital
Management, Inc.
Investment Subadviser: Trillium Asset
Management
Portfolio Managers: Cheryl Smith, CFA, Ph.D,
Economist and Portfolio Manager (portfolio manager since 2005), Paul Hilton,
CFA, Portfolio Manager (portfolio manager since 2018), Matthew Patsky, CFA,
Chief
12
Executive
Officer and Portfolio Manager of Trillium (portfolio manager since 2009) are
jointly responsible for the day-to-day portfolio management of the Fund.
Cyrus
McMillan, CFA, Fixed Income Analyst (Since 2016) works with the Portfolio
Managers on the day‑to‑day oversight of the Fund. (Effective December 31, 2023,
Mr. McMillan will become a member of the portfolio manager team)
For
important information on how to buy and sell shares in the Fund, taxes and
financial intermediary compensation, please turn to “Green Century Funds Summary
Section” on page 36 of this Prospectus.
13
GREEN CENTURY EQUITY FUND
SUMMARY SECTION
Investment Objective
The
Green Century Equity Fund seeks to achieve long-term total return which matches
the performance of an index comprised of the stocks of companies selected based
on environmental, social and governance (ESG) criteria.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. You may pay other fees, such
as brokerage commissions and other fees to financial intermediaries, which are
not reflected in the tables and examples below. If you invest in shares
of the Fund through an investment professional or financial intermediary, that
investment professional or financial intermediary may charge you a commission in
an amount determined and separately disclosed to you by that investment
professional or financial intermediary.
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Individual Investor Class |
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Institutional Class |
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Shareholder Fees
(fees paid directly from your
investment) |
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| |
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| |
Maximum
Sales Charge (Load) Imposed on Purchases |
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None |
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None |
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| |
Maximum
Deferred Sales Charge (Load) |
|
None |
|
None |
|
|
| |
Redemption
Fee (as a percentage of an amount redeemed within 60 days of
purchase) |
|
2.00% |
|
2.00% |
|
|
| |
Wire
Redemption Fee/Overnight Delivery Fee (if such services
are requested) |
|
$10/$30 |
|
$10/$30 |
|
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| |
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Annual Fund
Operating Expenses (expenses that you pay each year as a percentage
of the value of your investment) |
|
| |
| |
|
| |
Management
Fees |
|
0.23% |
|
0.23% |
|
|
| |
Distribution
(12b-1) Fees |
|
None |
|
None |
|
|
| |
Other
Expenses: |
|
| |
| |
|
| |
Administrative
Fees |
|
1.02% |
|
0.72% |
|
|
| |
Other
Fees |
|
None |
|
None |
|
|
| |
Total Annual Fund
Operating Expenses |
|
1.25% |
|
0.95% |
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| |
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Example
This
example is intended to help you compare the costs of investing in the Fund with
the cost of investing in other mutual funds. This example assumes that: (1) you
invest $10,000 in the Fund for the time periods indicated and then redeem all of
your shares at the end of those periods; (2) your investment has a 5%
14
return
each year; and (3) the Fund’s operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions, your costs
would be:
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| |
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| |
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1 Year |
|
3 Years |
|
5 Years |
|
10 Years |
Individual Investor Class |
|
$127 |
|
$397 |
|
$686 |
|
$1,511 |
Institutional Class |
|
$97 |
|
$303 |
|
$525 |
|
$1,166 |
Portfolio Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
During the most recent fiscal year, the Fund’s portfolio turnover rate was
4% of the average value of its
portfolio.
Principal Investment
Strategies
The
Fund invests substantially all of its assets in the common stocks which make up
the MSCI KLD 400 Social ex Fossil Fuels Index (the KLD400 ex Fossil Fuels Index
or the Index), a custom index calculated by MSCI, Inc. The KLD400 ex Fossil
Fuels Index is comprised of the common stocks of the approximately
400 companies in the MSCI KLD 400 Social Index (the KLD400 Index), minus
the stocks of the companies that:
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• |
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Explore
for, extract, produce, manufacture or refine coal, oil or gas;
|
|
• |
|
Produce
or transmit electricity derived from fossil fuels or transmit natural gas;
or |
Companies
included in the KLD400 Index are identified based on a review of ESG ratings;
the KLD400 Index is composed of companies with what MSCI calculates to have high
ESG ratings.
MSCI
ESG Research’s process in constructing the KLD400 Index includes the
identification of the following key ESG issues by industry; measuring a
company’s risk exposure for each key issue; and measuring a company’s risk
management for each key issue:
|
• |
|
Environmental
issues, including:
|
|
- |
Climate
Change: carbon emissions; product carbon footprint; financing
environmental impact; and climate change vulnerability.
|
|
- |
Natural
Capital: water stress; biodiversity and land use; and raw material
sourcing. |
|
- |
Pollution
and Waste: toxic emissions and waste; packaging material and waste; and
electronic waste.
|
|
- |
Environmental
Opportunities: clean technology; green building; and renewable energy.
|
|
• |
|
Social
issues, including:
|
|
- |
Human
Capital: labor management; health and safety; human capital development;
and supply chain labor standards.
|
15
|
- |
Product
Liability: product safety and quality; chemical safety; financial product
safety; privacy and data security; responsible investment; and insuring
health and demographic risk.
|
|
- |
Stakeholder
Opposition: controversial sourcing.
|
|
- |
Social
Opportunities: access to communication; access to finance; access to
health care; and opportunities in nutrition and health.
|
|
• |
|
Governance
issues, including:
|
|
- |
Corporate
Governance: board; pay; ownership and accounting.
|
|
- |
Corporate
Behavior: business ethics; anti-competitive practices; corruption and
instability; financial system instability; and tax transparency.
|
Companies
that MSCI ESG Research has determined to have significant business involvement
in the following will not be included in the KLD400 Index:
|
• |
|
Companies
that are primarily engaged in the production of nuclear energy or the
manufacture of nuclear equipment to produce nuclear energy or nuclear
weapons, in the belief that these products are unacceptably threatening to
a sustainable global environment.
|
|
• |
|
Companies
that are primarily engaged in the manufacture of tobacco products, which
are linked to air pollution, deforestation, and plastic pollution, as well
as health problems.
|
|
• |
|
Companies
that have a significant business involvement in genetically modified
organisms (GMOs) whose use has led to increased use of toxic herbicides.
|
|
• |
|
Companies
that are in industries that produce firearms or military weapons.
|
|
• |
|
Companies
that are primarily engaged in gambling, alcohol or adult entertainment
|
Green
Century believes that those companies which seek to manage their ESG risk may be
better prepared to avoid reputational, competitive, regulatory and material
risks and may benefit financially as a result.
The
Fund buys and sells stocks so that the composition of its securities holdings
will correspond, to the extent reasonably practicable, to the composition of
securities in the KLD400 ex Fossil Fuels Index. The weightings of the stocks in
the KLD400 ex Fossil Fuels Index are based on float-adjusted market
capitalizations, which means the largest companies comprise a higher percentage
of the KLD400 ex Fossil Fuels Index and the Index is more heavily weighted in
large than in small companies. As of September 30, 2023, large-cap U.S.
companies (defined as companies with market capitalizations of over $10 billion)
represented approximately 97.4% of the market value of the investments of the
Fund. To the extent practicable, the Fund will seek a correlation between the
weightings of securities held by the Fund and the weightings of the securities
of the KLD400 ex Fossil Fuels Index of 0.95 or better. A figure of 1.00 would
indicate a perfect correlation. The Fund’s ability to duplicate the performance
of the KLD400 ex Fossil Fuels Index will depend to some extent on the size and
timing of cash flows into and out of the Fund as well as the Fund’s expenses.
The Fund may be required to deviate its investments from the securities and
relative weightings of the Index to comply with certain regulatory limitations,
including diversification requirements under the 1940 Act and the Internal
Revenue Code of 1986, as amended.
Under
normal circumstances and as a matter of operating policy, the Fund will invest
at least 80% of its assets in equity securities and related investments.
16
Principal Risks
You may lose
money by investing in the Fund. As with any mutual fund, there
can be no guarantee that the Fund will achieve its objective. The following is a
summary description of certain risks of investing in the Fund:
Market
Risk. The market prices of
securities, or other assets held by the Fund may fall, sometimes rapidly or
unpredictably, due to general market conditions, such as real or perceived
adverse economic or political conditions, political instability, recessions,
inflation, changes in interest or currency rates, lack of liquidity in the bond
markets, the spread of infectious illness or other public health issues, weather
or climate events, armed conflict, market disruptions caused by tariffs, trade
disputes, sanctions or other government actions, or other factors or adverse
investor sentiment. If the market prices of the Fund’s securities and assets
fall, the value of your investment will go down. A change in financial condition
or other event affecting a single issuer or market may adversely impact
securities markets as a whole.
Changes
in market conditions will not typically have the same impact on all types of
securities. The market prices of securities may fall due to factors affecting a
particular issuer, industry or the securities market as a whole. In the past
decade, financial markets throughout the world have experienced increased
volatility, depressed valuations, decreased liquidity and heightened
uncertainty. Governmental and non-governmental issuers have defaulted on, or
been forced to restructure, their debts. These conditions may continue, recur,
worsen or spread. Events that have contributed to these market conditions
include, but are not limited to major cybersecurity events; geopolitical events
(including wars, terror attacks and economic sanctions); measures to address
budget deficits; downgrading of sovereign debt; changes in oil and commodity
prices; dramatic changes in currency exchange rates; global pandemics; and
public sentiment.
The
long-term impact of the COVID-19 pandemic and its subsequent variants on
economies, markets, industries and individual issuers, are not known. Some
sectors of the economy and individual issuers have experienced or may experience
particularly large losses. Periods of extreme volatility in the financial
markets, reduced liquidity of many instruments, increased government debt,
inflation, and disruptions to supply chains, consumer demand and employee
availability, may continue for some time.
Raising
the ceiling on U.S. government debt has become increasingly politicized. Any
failure to increase the total amount that the U.S. government is authorized to
borrow could lead to a default on U.S. government obligations, with
unpredictable consequences for economies and markets in the U.S. and elsewhere.
Inflation and interest rates have increased and may rise further. These
circumstances could adversely affect the value and liquidity of the Fund’s
investments, impair the Fund’s ability to satisfy redemption requests, and
negatively impact the Fund’s performance.
Following
Russia’s invasion of Ukraine, Russian securities have lost all, or nearly all,
their market value. Other securities or markets could be similarly affected by
past or future political, geopolitical or other events or conditions.
Governments
and central banks, including the U.S. Federal Reserve, have taken extraordinary
and unprecedented actions to support local and global economies and the
financial markets. These actions have resulted in significant expansion of
public debt, including in the U.S. The consequences of high public debt,
17
including
its future impact on the economy and securities markets, may not be known for
some time. U.S. Federal Reserve or other U.S. or non-U.S. governmental or
central bank actions, including increases or decreases in interest rates, or
contrary actions by different governments could negatively affect financial
markets generally, increase market volatility and reduce the value and liquidity
of securities in which the Fund invests. Policy and legislative changes in the
United States and in other countries are affecting many aspects of financial
regulation and these and other events affecting global markets, such as the
United Kingdom’s exit from the European Union (or Brexit), potential trade
imbalances with China or other countries, or sanctions or other government
actions against Russia, other nations or individuals or companies (or their
countermeasures), may in some instances contribute to decreased liquidity and
increased volatility in the financial markets. The impact of these changes on
the markets, and the practical implications for market participants, may not be
fully known for some time.
The
U.S. and other countries are periodically involved in disputes over trade and
other matters, which may result in tariffs, investment restrictions and adverse
impacts on affected companies and securities. For example, the U.S. has imposed
tariffs and other trade barriers on Chinese exports, has restricted sales of
certain categories of goods to China, and has established barriers to
investments in China. Trade disputes may adversely affect the economies of the
U.S. and its trading partners, as well as companies directly or indirectly
affected and financial markets generally. The U.S. government has prohibited
U.S. persons, such as the Fund, from investing in Chinese companies designated
as related to the Chinese military. These and possible future restrictions could
limit the Fund’s opportunities for investment and require the sale of securities
at a loss or make them illiquid. Moreover, the Chinese government is involved in
a longstanding dispute with Taiwan that has included threats of invasion. If the
political climate between the U.S. and China does not improve or continues to
deteriorate, if China were to attempt unification of Taiwan by force, or if
other geopolitical conflicts develop or get worse, economies, markets and
individual securities may be severely affected both regionally and globally, and
the value of the Fund’s assets may go down.
Economies
and financial markets throughout the world are increasingly interconnected.
Economic, financial or political events, trading and tariff arrangements, armed
conflict including Russia’s military invasion of Ukraine, terrorism, natural
disasters, infectious illness or other public health issues, cybersecurity
events, supply chain disruptions, sanctions against Russia, other nations or
individuals or companies and possible countermeasures, and other circumstances
in one country or region could have profound impacts on other countries or
regions and on global economies or markets. As a result, whether or not the Fund
invests in securities of issuers located in or with significant exposure to the
countries or regions directly affected, the value and liquidity of the Fund’s
investments may be negatively affected.
Environmental, Social and Governance Investing
Risk. The Fund’s environmental, social and governance criteria limit the
available investments compared with funds with no such criteria. Under certain
economic conditions, this could cause the Fund’s investment performance to be
worse or better than similar funds with no such criteria.
Equity Securities Risk. The Fund is heavily
invested in stocks. Like all funds invested in stocks, the Fund’s share price
will fluctuate daily depending on the performance of the companies that comprise
the Fund’s investments, the general market and the economy overall. After you
invest, the value of your shares may be less than what you paid for them.
18
Large Cap Companies Risk. Large-cap companies
may be unable to respond quickly to new competitive challenges such as changes
in technology, and also may not be able to attain the high growth rate of
successful smaller companies, especially during extended periods of economic
expansion. The large-cap companies in which the Fund invests may perform worse
than the stock market as a whole.
Small- and Mid-Cap Companies Risk. The Fund may be invested in small- and
mid-cap companies which involve greater risk than investing in the stocks of
larger, more established companies. Small- and mid-cap companies may lack the
management experience, financial resources and product diversification of large
companies and the frequency and volume of their trading may be less than that of
larger companies. Therefore, securities of small- and mid-cap companies may be
subject to wider and more erratic price fluctuations. Compared to large-cap
companies, small-cap and mid-cap companies, and the market for their equity
securities, may be more sensitive to changes in earnings results and investor
expectations or poor economic or market conditions, including those experienced
during a recession, experience sharper swings in market values, have limited
liquidity, be harder to value or to sell at the times and prices the Subadviser
thinks appropriate, and offer greater potential for gain and loss.
Market Sector Risk. The Fund may hold a large percentage of
securities in a single market sector. To the extent the Fund holds a large
percentage of securities in a single sector, its performance will be tied
closely to and affected by the performance of that sector, and the Fund will be
subject to a greater degree to any market price movements, regulatory or
technological change, economic conditions or other developments or risks
affecting such market sector than a fund without the same focus.
|
• |
|
Health Care Sector Risk. Industries in the health care sector,
such as health care supplies, health care services, biotechnology and
pharmaceuticals, may be significantly affected by government regulation
and reimbursement rates, approval of products by government agencies,
increases or decreases in the cost of medical products, services and
patient care, shortages of skilled personnel and increased personnel
costs, and product liability claims, among other factors. Many health care
companies are heavily dependent on patent protection, and the expiration
of a company’s patent may adversely affect that company’s profitability.
Healthcare companies are subject to competitive forces that may result in
price discounting, and may be thinly capitalized and susceptible to
product obsolescence.
|
|
• |
|
Technology Sector Risk. Securities in
the technology sector, such as information technology, communications
equipment, computer hardware and software, and office and scientific
equipment, are generally subject to risks of rapidly evolving technology,
short product lives, rates of corporate expenditures, falling prices and
profits, competition from new market entrants, and general economic
conditions. They are also heavily dependent on intellectual property
rights and may be adversely affected by the loss or impairment of, or
inability to enforce, those rights.
|
|
• |
|
Consumer Discretionary Sector Risk. Industries in the consumer
discretionary segment, such as consumer durables, hotels, restaurants,
media, retailing and automobiles, may be significantly affected by the
performance of domestic and international economies, interest rates,
competition, consumer confidence and spending, and changes in demographics
and consumer tastes.
|
Liquidity Risk. Liquidity risk exists when
particular investments are difficult to purchase or sell. When the Fund holds
these types of investments, the Fund’s portfolio may be more difficult to value,
especially during periods of market turmoil or due to adverse changes in the
conditions of a particular issuer. Markets may become illiquid when there are
few, if any, interested buyers or sellers or when dealers are unwilling or
19
unable
to make a market for certain securities or when dealer market-making capacity is
otherwise reduced. During times of market turmoil, there have been, and may be,
no buyers for securities in entire asset classes, including U.S. Treasury
securities. As a general matter, dealers recently have been less willing to make
markets for fixed income securities. When the Fund holds illiquid investments,
the Fund may be harder to value, especially in changing markets. Investments by
the Fund in below investment grade securities, foreign securities, and corporate
loans tend to involve greater liquidity risk. If the Fund is forced to sell or
unwind these investments to meet redemptions or for other cash needs or try to
limit losses, the Fund may suffer a substantial loss or may not be able to sell
at all. Additionally, the market for certain investments may become illiquid
under adverse market or economic conditions independent of any specific adverse
changes in the conditions of a particular issuer. In such cases, the Fund, due
to limitations on investments in illiquid securities and the difficulty in
purchasing and selling such securities, may be unable to achieve its desired
level of exposure to certain sectors. Further, certain securities, once sold,
may not settle for an extended period. The Fund will not receive its sales
proceeds until that time, which may constrain the Fund’s ability to meet its
obligations (including obligations to redeeming shareholders).
Index Fund Risk. The Fund will invest in the
stocks composing the KLD400 ex Fossil Fuels Index regardless of how the Index is
performing. It will not shift concentration from one industry to another, or
from stocks to bonds or cash, in order to defend against a falling stock market.
The Index may, at times, become focused in stocks of a particular sector,
category or group of companies. Because the Fund seeks to track the KLD400 ex
Fossil Fuels Index, the Fund may underperform the overall stock market. The Fund
may be required to deviate its investments from the securities and relative
weightings of the Index to comply with certain regulatory limitations, including
diversification requirements under the 1940 Act and the Internal Revenue Code of
1986, as amended.
Non-Correlation Risk. The performance of the
Fund and of the KLD400 ex Fossil Fuels Index may vary for a variety of reasons.
For example, the Fund incurs operating expenses and portfolio transaction costs
not incurred by the Index. In addition, the Fund may not be fully invested in
the component securities of the Index, or there may be changes in the
composition of the Index. Certain regulatory limitations, including
diversification requirements under the 1940 Act and the Internal Revenue Code of
1986, as amended, may limit the ability of the Fund to completely replicate the
Index.
Valuation Risk. The sales price the Fund could
receive for any particular portfolio investment may differ from the Fund’s
valuation of the investment, particularly for securities that trade in thin or
volatile markets or that are valued using a fair value methodology. These
differences may increase significantly and affect Fund investments more broadly
during periods of market volatility. Investors who purchase or redeem Fund
shares on days when the Fund is holding fair-valued securities may receive fewer
or more shares or lower or higher redemption proceeds than they would have
received if the securities had not been fair-valued or if a different valuation
methodology had been used. The ability to value the Fund’s investments may be
impacted by technological issues and/or errors by pricing services or other
third party service providers.
Redemption Risk. The Fund may experience
periods of heavy redemptions that could cause the Fund to liquidate its assets
at inopportune times or at a loss or depressed value, or accelerate taxable
gains or transaction costs, particularly during periods of declining or illiquid
markets. Redemption risk is greater to
20
the
extent that the Fund has investors with large shareholdings, short investment
horizons, or unpredictable cash flow needs. In addition, redemption risk is
heightened during periods of overall market turmoil. The redemption by one or
more large shareholders of their holdings in the Fund could hurt performance
and/or cause the remaining shareholders in the Fund to lose money. Further, if
one decision maker has control of Fund shares owned by separate Fund
shareholders, including clients or affiliates of the Fund’s Adviser, redemptions
by these shareholders may further increase the Fund’s redemption risk. If the
Fund is forced to liquidate its assets under unfavorable conditions or at
inopportune times, the value of your investment could decline.
Cybersecurity
Risk. Cybersecurity failures by or breaches of the
Fund’s Adviser, Subadviser, transfer agent, distributor, custodian, fund
accounting agent or other service providers may disrupt Fund operations,
interfere with the Fund’s ability to calculate its NAV, prevent Fund
shareholders from purchasing, redeeming or exchanging shares or receiving
distributions or receiving timely information regarding the Fund or their
investment in the Fund, cause loss of or unauthorized access to private
shareholder information, and result in financial losses to the Fund and its
Shareholders, regulatory fines, penalties, reputational damage, or additional
compliance costs. Substantial costs may be incurred in order to prevent any
cyber incidents in the future. The Fund and its shareholders could be negatively
impacted as a result. New ways to carry out cyber attacks continue to develop.
There is a chance that some risks have not been identified or prepared for, or
that an attack may not be detected, which puts limitations on the Fund’s ability
to plan for or respond to a cyber attack.
These
and other risks are discussed in more detail in “Additional Information About
the Funds’ Investment Objectives, Strategies and Risks” in this Prospectus and
in the Statement of Additional Information.
Performance
The bar chart and the average annual total return
table below provide some indication of the risks of investing in the Fund by
showing how the Fund has performed in the past. The bar chart shows changes in
the performance of the Fund’s Individual Investor Class from year to year. The
table shows how the average annual total return for each class of the Fund for
1, 5 and 10 year periods and since inception compare with the returns of the
S&P 500 Index, a broad measure of market
performance.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how it will perform in the future. Updated performance
information is available on the Fund’s website, www.greencentury.com/fund-performance/,
or by calling 1-800-934-7336.
The
Fund, which commenced operations in September 1995, invested all its assets in
an existing separate registered investment company which had the same investment
objective as the Fund (the Domini Social Equity Trust) until November 28, 2006.
The performance for the period prior to the Fund’s inception reflects the
performance of the Domini Social Equity Trust adjusted to reflect the deduction
of the charges and expenses of the Fund.
As
of April 1, 2014, the Fund invests in the common stocks which make up the MSCI
KLD 400 Social ex Fossil Fuels Index. Prior to April 1, 2014, the Fund invested
in the common stocks which made up the MSCI
21
KLD
400 Social Index. Performance for periods prior to April 1, 2014 reflects the
investment strategy in effect for the Fund during such periods.
Annual Total Returns for
Years Ended December 31
During
the period shown, the best quarterly
performance of the Fund’s Individual Investor Class was
21.21%, for the quarter ended 6/30/20. The worst quarterly
performance of the Fund’s Individual Investor Class was
-17.07%, for the quarter ended
3/31/20.
As
of September 30, 2023, the
year-to-date
return for the Fund’s Individual Investor Class was
13.99%.
22
Average Annual Total
Returns For the Periods Ended December 31, 2022
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1 Year |
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5 Years |
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10 Years |
|
|
Since Inception (June 3, 1991) |
|
|
|
|
Green Century Equity Fund – Individual Investor
Class |
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| |
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| |
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| |
|
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| |
|
| |
Return
before taxes |
|
|
‑23.04 |
% |
|
|
8.89 |
% |
|
|
12.00 |
% |
|
|
8.62 |
% |
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| |
| |
|
|
| |
|
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| |
|
|
| |
|
|
| |
|
| |
Return
after taxes on distributions |
|
|
‑23.12 |
% |
|
|
8.60 |
% |
|
|
11.65 |
% |
|
|
7.88 |
% |
|
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| |
| |
|
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| |
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| |
|
|
| |
|
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| |
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| |
Return
after taxes on distributions and sale of Fund shares |
|
|
‑13.58 |
% |
|
|
7.00 |
% |
|
|
9.94 |
% |
|
|
7.21 |
% |
|
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| |
| |
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| |
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| |
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| |
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| |
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| |
Green Century Equity Fund – Institutional
Class |
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| |
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| |
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| |
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| |
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| |
Return
before taxes |
|
|
‑22.81 |
% |
|
|
9.20 |
% |
|
|
12.15 |
% |
|
|
8.67 |
% |
|
|
| |
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
S&P
500 Index (reflects no deduction for fees, expenses or
taxes) |
|
|
‑18.11 |
% |
|
|
9.42 |
% |
|
|
12.56 |
% |
|
|
9.71 |
% |
|
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| |
| |
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| |
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| |
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| |
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| |
Institutional
Class shares were offered as of April 30, 2018. The Institutional
Class performance for periods prior to April 30, 2018 reflects the
performance of the Fund’s Individual Investor Class. The after‑tax returns are shown for the Individual
Investor Class of the Fund and the after‑tax returns for the Institutional
Class of the Fund will vary. The after-tax returns are calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s
tax situation and may differ from those shown. After-tax returns shown are not
relevant to investors who hold their Fund shares through tax-advantaged
arrangements, such as 401(k) plans or individual retirement accounts.
Returns after taxes on distributions and sale of
fund shares are higher than returns before taxes for certain periods shown
because they reflect the tax benefit of capital losses realized on the sale of
fund shares.
Management
Investment Adviser: Green Century Capital
Management, Inc.
Investment Subadviser: Northern Trust
Investments, Inc. (NTI)
Portfolio Manager: Brent Reeder, Senior Vice
President and Director of US Index Equities at NTI (portfolio manager since
2010).
For
important information on how to buy and sell shares in the Fund, taxes and
financial intermediary compensation, please turn to “Green Century Funds Summary
Section” on page 36 of this Prospectus.
23
GREEN CENTURY MSCI
INTERNATIONAL INDEX FUND SUMMARY SECTION
Investment Objective
The
Green Century MSCI International Index Fund seeks to achieve long-term total
return which matches the performance of an index comprised of the stocks of
foreign companies selected based on environmental, social and governance (ESG)
criteria.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. You may pay other fees, such
as brokerage commissions and other fees to financial intermediaries, which are
not reflected in the tables and examples below. If you invest in shares
of the Fund through an investment professional or financial intermediary, that
investment professional or financial intermediary may charge you a commission in
an amount determined and separately disclosed to you by that investment
professional or financial intermediary.
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| |
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| |
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Individual Investor Class |
|
Institutional Class |
|
|
|
Shareholder Fees
(fees paid directly from your
investment) |
|
| |
| |
|
| |
Maximum
Sales Charge (Load) Imposed on Purchases |
|
None |
|
None |
|
|
| |
Maximum
Deferred Sales Charge (Load) |
|
None |
|
None |
|
|
| |
Redemption
Fee (as a percentage of an amount redeemed within 60 days of
purchase) |
|
2.00% |
|
2.00% |
|
|
| |
Wire
Redemption Fee/Overnight Delivery Fee (if such services
are requested) |
|
$10/$30 |
|
$10/$30 |
|
|
| |
|
Annual Fund
Operating Expenses (expenses that you pay each year as a percentage
of the value of your investment) |
|
| |
| |
|
| |
Management
Fees |
|
0.28% |
|
0.28% |
|
|
| |
Distribution
(12b-1) Fees |
|
None |
|
None |
|
|
| |
Other
Expenses: |
|
| |
| |
|
| |
Administrative
Fees |
|
1.00% |
|
0.70% |
|
|
| |
Other
Fees |
|
None |
|
None |
|
|
| |
Total Annual Fund
Operating Expenses |
|
1.28% |
|
0.98% |
|
|
| |
| |
| |
| |
|
| |
Example
This
example is intended to help you compare the costs of investing in the Fund with
the cost of investing in other mutual funds. This example assumes that:
(1) you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods; (2) your investment
has a 5%
24
return
each year; and (3) the Fund’s operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions, your costs
would be:
|
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| |
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|
| |
|
|
1 Year |
|
3 Years |
|
5 Years |
|
10 Years |
Individual Investor Class |
|
$130 |
|
$406 |
|
$702 |
|
$1,545 |
Institutional Class |
|
$100 |
|
$312 |
|
$542 |
|
$1,201 |
Portfolio Turnover
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the Fund’s performance.
During the most recent fiscal year, the Fund’s portfolio turnover rate was
42% of the average value of its
portfolio.
Principal Investment
Strategies
The
Fund invests substantially all of its assets in the common stocks which make up
the MSCI World ex USA SRI ex Fossil Fuels Index (the World ex USA SRI ex Fossil
Fuels Index or the Index), a custom index calculated by MSCI, Inc. The World ex
USA SRI ex Fossil Fuels Index is comprised of the common stocks of the companies
in the MSCI World ex USA SRI Index (the World ex USA SRI Index), minus the
stocks of the companies that:
|
• |
|
Explore
for, extract, produce, manufacture or refine coal, oil or gas;
|
|
• |
|
Produce
or transmit electricity derived from fossil fuels or transmit natural gas;
|
The
World ex USA SRI Index includes large and mid‑cap stocks from approximately 22
developed markets countries (excluding the U.S.). The World ex USA SRI Index is
a capitalization weighted index that provides exposure to companies with what
MSCI calculates to have high ESG ratings.
MSCI
ESG Research’s process in constructing the World ex USA SRI Index includes the
identification of the following key ESG issues by industry; measuring a
company’s risk exposure for each key issue; and measuring a company’s risk
management for each key issue:
|
• |
|
Environmental
issues, including:
|
|
- |
|
Climate
Change: carbon emissions; product carbon footprint; financing
environmental impact; and climate change vulnerability.
|
|
- |
|
Natural
Capital: water stress; biodiversity and land use; and raw material
sourcing. |
|
- |
|
Pollution
and Waste: toxic emissions and waste; packaging material and waste; and
electronic waste.
|
|
- |
|
Environmental
Opportunities: clean technology; green building; and renewable energy.
|
|
• |
|
Social
issues, including:
|
|
- |
|
Human
Capital: labor management; health and safety; human capital development;
and supply chain labor standards.
|
25
|
- |
|
Product
Liability: product safety and quality; chemical safety; financial product
safety; privacy and data security; responsible investment; and insuring
health and demographic risk.
|
|
- |
|
Stakeholder
Opposition: controversial sourcing.
|
|
- |
|
Social
Opportunities: access to communication; access to finance; access to
health care; and opportunities in nutrition and health.
|
|
• |
|
Governance
issues, including:
|
|
- |
|
Corporate
Governance: board; pay; ownership and accounting.
|
|
- |
|
Corporate
Behavior: business ethics; anti-competitive practices; corruption and
instability; financial system instability; and tax transparency.]
|
Companies
that MSCI ESG Research has determined to have significant business involvement
in the following will not be included in the World ex USA SRI Index:
|
• |
|
Companies
that are primarily engaged in the production of nuclear energy or the
manufacture of nuclear equipment to produce nuclear energy or nuclear
weapons, in the belief that these products are unacceptably threatening to
a sustainable global environment.
|
|
• |
|
Companies
that are primarily engaged in the manufacture of tobacco products, which
are linked to air pollution, deforestation, and plastic pollution, as well
as health problems.
|
|
• |
|
Companies
that have a significant business involvement in genetically modified
organisms (GMOs) whose use has led to increased use of toxic herbicides.
|
|
• |
|
Companies
that are in industries that produce firearms or military weapons.
|
|
• |
|
Companies
that are primarily engaged in gambling, alcohol or adult entertainment
|
Green
Century believes that those companies which seek to manage their ESG risks may
be better prepared to avoid reputational, competitive, regulatory and material
risks and may benefit financially as a result.
The
Fund buys and sells stocks so that the composition of its securities holdings
will correspond, to the extent reasonably practicable, to the composition of
securities in the World ex USA SRI ex Fossil Fuels Index. The weightings of the
stocks in the World ex USA SRI ex Fossil Fuels Index are based on float-adjusted
market capitalizations, which means the largest companies comprise a higher
percentage of the World ex USA SRI ex Fossil Fuels Index and the Index is more
heavily weighted in large than in smaller companies. As of September 30, 2023,
the World ex USA SRI ex Fossil Fuels Index included companies with market
capitalizations between approximately $1.6 billion and $209 billion. To the
extent practicable, the Fund will seek a correlation between the weightings of
securities held by the Fund and the weightings of the securities of the World ex
USA SRI ex Fossil Fuels Index of 0.95 or better. A figure of 1.00 would indicate
a perfect correlation. The Fund’s ability to duplicate the performance of the
World ex USA SRI ex Fossil Fuels Index will depend to some extent on the size
and timing of cash flows into and out of the Fund as well as the Fund’s
expenses. The Fund may be required to deviate its investments from the
securities and relative weightings of the Index to comply with certain
regulatory limitations, including diversification requirements under the 1940
Act and the Internal Revenue Code of 1986, as amended.
Under
normal circumstances and as a matter of operating policy, the Fund will invest
at least 80% of its assets in the component securities of the World ex USA SRI
ex Fossil Fuels Index and may invest in American Depository Receipts, Global
Depository Receipts and Euro Depository Receipts representing the component
securities of the Index.
26
Principal Risks
You may lose
money by investing in the Fund. As with any mutual fund, there
can be no guarantee that the Fund will achieve its objective. The following is a
summary description of certain risks of investing in the Fund:
Market Risk. The market prices of securities or other
assets held by the Fund may fall, sometimes rapidly or unpredictably, due to
general market conditions, such as real or perceived adverse economic or
political conditions, political instability, recessions, inflation, changes in
interest or currency rates, lack of liquidity in the bond markets, the spread of
infectious illness or other public health issues, weather or climate events,
armed conflict, market disruptions caused by tariffs, trade disputes, sanctions
or other government actions, or other factors, or adverse investor sentiment. If
the market prices of the Fund’s securities and assets fall, the value of your
investment will go down. A change in financial condition or other event
affecting a single issuer may adversely impact securities markets as a whole.
Changes
in market conditions will not typically have the same impact on all types of
securities. The market prices of securities may fall due to factors affecting a
particular issuer, industry or the securities market as a whole. In the past
decade, financial markets throughout the world have experienced increased
volatility, depressed valuations, decreased liquidity and heightened
uncertainty. Governmental and non‑ governmental issuers have defaulted on, or
been forced to restructure, their debts. These conditions may continue, recur,
worsen or spread. Events that have contributed to these market conditions
include, but are not limited to major cybersecurity events; geopolitical events
(including wars, terror attacks and economic sanctions); measures to address
budget deficits; downgrading of sovereign debt; changes in oil and commodity
prices; dramatic changes in currency exchange rates; global pandemics; and
public sentiment.
The
long-term impact of the COVID-19 pandemic and its subsequent variants on
economies, markets, industries and individual issuers, are not known. Some
sectors of the economy and individual issuers have experienced or may experience
particularly large losses. Periods of extreme volatility in the financial
markets, reduced liquidity of many instruments, increased government debt,
inflation, and disruptions to supply chains, consumer demand and employee
availability, may continue for some time.
Raising
the ceiling on U.S. government debt has become increasingly politicized. Any
failure to increase the total amount that the U.S. government is authorized to
borrow could lead to a default on U.S. government obligations, with
unpredictable consequences for economies and markets in the U.S. and elsewhere.
Inflation and interest rates have increased and may rise further. These
circumstances could adversely affect the value and liquidity of the Fund’s
investments, impair the Fund’s ability to satisfy redemption requests, and
negatively impact the Fund’s performance.
Following
Russia’s invasion of Ukraine, Russian securities have lost all, or nearly all,
their market value. Other securities or markets could be similarly affected by
past or future political, geopolitical or other events or conditions.
Governments
and central banks, including the U.S. Federal Reserve, have taken extraordinary
and unprecedented actions to support local and global economies and the
financial markets. These actions have resulted in significant expansion of
public debt, including in the U.S. The consequences of high public debt,
27
including
its future impact on the economy and securities markets, may not be known for
some time. U.S. Federal Reserve or other U.S. or non‑U.S. governmental or
central bank actions, including increases or decreases in interest rates, or
contrary actions by different governments could negatively affect financial
markets generally, increase market volatility and reduce the value and liquidity
of securities in which the Fund invests. Policy and legislative changes in the
United States and in other countries are affecting many aspects of financial
regulation and these and other events affecting global markets, such as the
United Kingdom’s exit from the European Union (or Brexit), potential trade
imbalances with China or other countries, or sanctions or other government
actions against Russia, other nations or individuals or companies (or their
countermeasures), may in some instances contribute to decreased liquidity and
increased volatility in the financial markets. The impact of these changes on
the markets, and the practical implications for market participants, may not be
fully known for some time.
The
U.S. and other countries are periodically involved in disputes over trade and
other matters, which may result in tariffs, investment restrictions and adverse
impacts on affected companies and securities. For example, the U.S. has imposed
tariffs and other trade barriers on Chinese exports, has restricted sales of
certain categories of goods to China, and has established barriers to
investments in China. Trade disputes may adversely affect the economies of the
U.S. and its trading partners, as well as companies directly or indirectly
affected and financial markets generally. The U.S. government has prohibited
U.S. persons, such as the Fund, from investing in Chinese companies designated
as related to the Chinese military. These and possible future restrictions could
limit the Fund’s opportunities for investment and require the sale of securities
at a loss or make them illiquid. Moreover, the Chinese government is involved in
a longstanding dispute with Taiwan that has included threats of invasion. If the
political climate between the U.S. and China does not improve or continues to
deteriorate, if China were to attempt unification of Taiwan by force, or if
other geopolitical conflicts develop or get worse, economies, markets and
individual securities may be severely affected both regionally and globally, and
the value of the Fund’s assets may go down.
Economies
and financial markets throughout the world are increasingly interconnected.
Economic, financial or political events, trading and tariff arrangements, armed
conflict including Russia’s military invasion of Ukraine, terrorism, natural
disasters, infectious illness or public health issues, cybersecurity events,
supply chain disruptions, sanctions against Russia, other nations or individuals
or companies and possible countermeasures, and other circumstances in one
country or region could have profound impacts on other countries or regions and
on global economies or markets. As a result, whether or not the Fund invests in
securities of issuers located in or with significant exposure to the countries
or regions directly affected, the value and liquidity of the Fund’s investments
may be negatively affected.
Environmental, Social and Governance Investing
Risk. The Fund’s environmental, social and governance criteria limit the
available investments compared with funds with no such criteria. Under certain
economic conditions, this could cause the Fund’s investment performance to be
worse or better than similar funds with no such criteria.
Equity Securities Risk. The Fund is heavily
invested in stocks. Like all funds invested in stocks, the Fund’s share price
will fluctuate daily depending on the performance of the companies that comprise
the Fund’s investments, the general market and the economy overall. After you
invest, the value of your shares may be less than what you paid for them.
28
Forward Foreign Currency Transactions Risk.
The Fund may, but is not required to, purchase and sell forward foreign
currency exchange contracts in non-U.S. currencies in connection with its
investments, including as a means of managing relative currency exposure. The
Fund may not fully benefit from or may lose money on forward foreign currency
transactions if changes in currency rates do not occur as anticipated or do not
correspond accurately to changes in the value of the Fund’s holdings, or if the
counterparty defaults. Such transactions may also prevent the fund from
realizing profits on favorable movements in exchange rates. Risk of counterparty
default is greater for counterparties located in emerging markets.
Using
derivatives such as forward foreign currency exchange contracts can increase
Fund losses and reduce opportunities for gains when market prices, interest
rates or the derivative instruments themselves behave in a way not anticipated
by the Fund. Using derivatives also can have a leveraging effect and increase
fund volatility. Certain derivatives have the potential for unlimited loss,
regardless of the size of the initial investment. Derivatives may be difficult
to sell, unwind or value, and the counterparty may default on its obligations to
the Fund. Many over-the-counter derivative instruments will not have liquidity
beyond the counterparty to the instrument. Use of derivatives or similar
instruments may have different tax consequences for the Fund than an investment
in the underlying security, and those differences may affect the amount, timing
and character of income distributed to shareholders. The Fund’s use of
derivatives may also increase the amount of taxes payable by shareholders.
Derivatives may not be available on terms that make economic sense (for example,
they may be too costly). Risks associated with the use of derivatives are
magnified to the extent that a large portion of the Fund’s assets are committed
to derivatives in general or are invested in just one or a few types of
derivatives. The U.S. government and foreign governments are in the process of
adopting and implementing regulations governing derivative markets, including
mandatory clearing of certain derivatives, margin, and reporting requirements.
The ultimate impact of the regulations remains unclear.
Large Cap Companies Risk. Large‑cap companies
may be unable to respond quickly to new competitive challenges such as changes
in technology, and also may not be able to attain the high growth rate of
successful smaller companies, especially during extended periods of economic
expansion. The large‑cap companies in which the Fund invests may perform worse
than the stock market as a whole.
Mid‑Cap Companies Risk. The Fund may be
invested in mid‑cap companies which involve greater risk than investing in the
stocks of larger, more established companies. Mid‑cap companies may lack the
management experience, financial resources and product diversification of large
companies and the frequency and volume of their trading may be less than that of
larger companies. Therefore, securities of mid‑cap companies may be subject to
wider and more erratic price fluctuations. Compared to large‑cap companies,
small‑cap and mid‑cap companies, and the market for their equity securities, may
be more sensitive to changes in earnings results and investor expectations or
poor economic or market conditions, including those experienced during a
recession, experience sharper swings in market values, have limited liquidity,
be harder to value or to sell at the times and prices the Subadviser thinks
appropriate, and offer greater potential for gain and loss.
Risks of Non‑U.S. Investments. Investing in
non‑U.S. issuers or in securities of U.S. issuers with significant exposure to
foreign markets may involve unique risks compared to investing in securities of
U.S. issuers. These risks are more pronounced to the extent that the Fund
invests significantly in one region or country. These risks may include
different financial reporting practices and regulatory standards, less liquid
trading
29
markets,
currency risks, changes in economic, political, regulatory and social
conditions, armed conflict including Russia’s military invasion of Ukraine, and
sanctions or other government actions against Russia, other nations or
individuals or companies (or their countermeasures), sustained economic
downturns, reduction of government or central bank support, inadequate
accounting standards, tariffs, tax disputes or other tax burdens, weather or
climate events, natural disasters, terrorism, nationalization or expropriation
of assets, arbitrary application of laws and regulations or lack of rule of law,
and investment and repatriation restrictions. Lack of information and less
market regulation also may affect the value of these securities. Withholding and
other non-U.S. taxes may decrease the Fund’s return. Non-U.S. issuers may be
located in parts of the world that have historically been prone to natural
disasters. Emerging market economies tend to be less diversified than those of
more developed countries. They typically have fewer medical and economic
resources than more developed countries and thus they may be less able to
control or mitigate the effects of a pandemic.
Country Risk. The Fund expects to diversify
its investments among issuers with significant exposure to various countries
throughout the world but it may hold a large number of securities whose issuers
have exposure to a single country, including but not limited to Japan, France,
Germany, Canada, Switzerland and the United Kingdom (the “U.K.”). Significant
exposure to a single country would increase the risk that economic, political,
and social conditions in that country will have a significant impact on Fund
performance.
|
• |
|
The
Japanese economy is highly dependent upon international trade,
particularly with the United States and other Asian countries. Because of
its trade dependence, the Japanese economy is particularly exposed to the
risks of currency fluctuation, foreign trade policy and regional and
global economic disruption. In the past, Japan’s economic growth rate has
remained relatively low, and it may remain low in the future. The Japanese
economic growth rate could be impacted by Bank of Japan monetary policies,
rising interest rates, tax increases, budget deficits, consumer confidence
and volatility in the Japanese yen. Japan’s economy has been adversely
affected by trade tariffs, other protectionist measures, competition from
emerging economies and the economic conditions of trading partners.
Strained foreign relations with neighboring countries (China, South Korea,
North Korea and Russia) may not only negatively impact the Japanese
economy but also the geographic region as well as globally. Economic
growth in Japan is heavily dependent on continued growth in international
trade, government support of the financial services sector, among other
troubled sectors, and consistent government policy. In addition, the
Japanese economy has been adversely affected by certain structural issues,
including an aging population, significant non‑performing loan portfolios
at major financial institutions, substantial government deficits, low
domestic consumption and natural and environmental disasters.
|
|
• |
|
The
French economy, including demand for French exports, may be adversely
affected by the U.K.’s withdrawal from the European Union (“EU”). As a
result, the French economy may experience adverse trends due to concerns
about a prolonged economic downturn, potential weakness in exports, high
rates of unemployment and rising government debt levels. The French
economy is dependent on agricultural exports, and as a result, is
susceptible to fluctuations in demand for agricultural products. France
has experienced several terrorist attacks in the past several years.
|
|
• |
|
Germany
has an industrial and export dependent economy and relies heavily on trade
with key trading partners, including the Netherlands, China, the U.S., the
U.K., France, Italy and other |
30
|
European
countries. Changes in the price or demand for German exports may have an
adverse impact on Germany’s economy. In addition, heavy regulation of
labor, energy and product markets in Germany may have an adverse impact on
German issuers. Such regulations may negatively impact economic growth or
cause prolonged periods of recession. Ongoing concerns regarding the
economic health of the EU have negatively impacted the earnings of German
financial services companies.
|
|
• |
|
The
U.K. has one of the largest economies in Europe, and the U.S. and other
European countries are substantial trading partners of the U.K. As a
result, the U.K.’s economy may be impacted by changes to the economic
condition of the U.S. and other European countries. The U.K.’s economy
will also be significantly affected by the U.K.’s exit from the EU. The
precise impact on the U.K’s economy as a result of its departure from the
EU depends to a large degree on its ability to conclude favorable trade
deals with the EU and other countries and offset the increased costs of
trade resulting from the U.K.’s loss of its membership in the EU single
market. Therefore, uncertainty remains as to the long-term consequences of
Brexit |
|
• |
|
The
Canadian economy is heavily dependent on relationships with certain key
trading partners, including the U.S. and China. The Canadian economy is
sensitive to fluctuations in certain commodity markets.
|
|
• |
|
International
trade is a large component of the Swiss economy and Switzerland depends
upon exports to generate economic growth. The Swiss economy relies on
certain key trading partners including the United States, Europe and
China. Switzerland’s economic growth is generally correlated to slowdowns
and growth trends experienced in other countries, including the U.S. and
certain Western European countries.
|
Market Sector Risk. The Fund may hold a large
percentage of securities in a single market sector. To the extent the Fund holds
a large percentage of securities in a single sector, its performance will be
tied closely to and affected by the performance of that sector, and the Fund
will be subject to a greater degree to any market price movements, regulatory or
technological change, economic conditions or other developments or risks
affecting such market sector than a fund without the same focus.
|
• |
|
Financial Sector Risk. Issuers in the
financial sector, such as banks, insurance companies and broker- dealers,
may be sensitive to changes in interest rates, credit rating downgrades,
decreased liquidity in credit markets, and general economic activity and
are generally subject to extensive government regulation.
|
|
• |
|
Technology Sector Risk. Securities in
the technology sector, such as information technology, communications
equipment, computer hardware and software, and office and scientific
equipment, are generally subject to risks of rapidly evolving technology,
short product lives, rates of corporate expenditures, falling prices and
profits, competition from new market entrants, and general economic
conditions. They are also heavily dependent on intellectual property
rights and may be adversely affected by the loss or impairment of, or
inability to enforce, those rights.
|
Liquidity Risk. Liquidity risk exists when
particular investments are difficult to purchase or sell. When the Fund holds
these types of investments, the Fund’s portfolio may be more difficult to value,
especially during periods of market turmoil or due to adverse changes in the
conditions of a particular issuer. Markets may become illiquid when there are
few, if any, interested buyers or sellers or when dealers are unwilling or
unable to make a market for certain securities. As a general matter, dealers
recently have been less willing to make markets for fixed income securities or
when dealer market-making capacity is otherwise reduced.
31
During
times of market turmoil, there have been, and may be, no buyers for securities
in entire asset classes, including U.S. Treasury securities. When the Fund holds
illiquid investments, the Fund may be harder to value, especially in changing
markets. Investments by the Fund in below investment grade securities, foreign
securities, and corporate loans tend to involve greater liquidity risk. If the
Fund is forced to sell or unwind these investments to meet redemptions or for
other cash needs or try to limit losses, the Fund may suffer a substantial loss
or may not be able to sell at all. Additionally, the market for certain
investments may become illiquid under adverse market or economic conditions
independent of any specific adverse changes in the conditions of a particular
issuer. In such cases, the Fund, due to limitations on investments in illiquid
securities and the difficulty in purchasing and selling such securities, may be
unable to achieve its desired level of exposure to certain sectors. Further,
certain securities, once sold, may not settle for an extended period. The Fund
will not receive its sales proceeds until that time, which may constrain the
Fund’s ability to meet its obligations (including obligations to redeeming
shareholders).
Index Fund Risk. The Fund will invest in the
stocks composing the World ex USA SRI ex Fossil Fuels Index regardless of how
the Index is performing. It will not shift concentration from one industry to
another, or from stocks to bonds or cash, in order to defend against a falling
stock market. The Index may, at times, become focused in stocks of a particular
sector, category or group of companies. Because the Fund seeks to track the
World ex USA SRI ex Fossil Fuels Index, the Fund may underperform the overall
stock market. The Fund may be required to deviate its investments from the
securities and relative weightings of the Index to comply with certain
regulatory limitations, including diversification requirements under the 1940
Act and the Internal Revenue Code of 1986, as amended.
Non-Correlation Risk. The performance of the
Fund and of the World ex USA SRI ex Fossil Fuels Index may vary for a variety of
reasons. For example, the Fund incurs operating expenses and portfolio
transaction costs not incurred by the Index. In addition, the Fund may not be
fully invested in the component securities of the Index, or there may be changes
in the composition of the Index. Certain regulatory limitations, including
diversification requirements under the 1940 Act and the Internal Revenue Code of
1986, as amended, may limit the ability of the Fund to completely replicate the
Index.
Valuation Risk. Nearly all of the Fund’s
securities are valued using a fair value methodology. The sales price the Fund
could receive for any particular portfolio investment may differ from the Fund’s
valuation of the investment, particularly for securities that trade in thin or
volatile markets. These differences may increase significantly and affect Fund
investments more broadly during periods of market volatility. Investors who
purchase or redeem Fund shares may receive fewer or more shares or lower or
higher redemption proceeds than they would have received if the securities had
not been fair-valued or if a different valuation methodology had been used. The
ability to value the Fund’s investments may be impacted by technological issues
and/or errors by pricing services or other third party service providers.
Redemption Risk. The Fund may experience
periods of heavy redemptions that could cause the Fund to liquidate its assets
at inopportune times or at a loss or depressed value, or accelerate taxable
gains or transaction costs, particularly during periods of declining or illiquid
markets. Redemption risk is greater to the extent that the Fund has investors
with large shareholdings, short investment horizons, or unpredictable cash flow
needs. In addition, redemption risk is heightened during periods of overall
market turmoil. The redemption by one or more large shareholders of their
holdings in the Fund could hurt performance and/or
32
cause
the remaining shareholders in the Fund to lose money. Further, if one decision
maker has control of Fund shares owned by separate Fund shareholders, including
clients or affiliates of the Fund’s Adviser, redemptions by these shareholders
may further increase the Fund’s redemption risk. If the Fund is forced to
liquidate its assets under unfavorable conditions or at inopportune times, the
value of your investment could decline.
Cybersecurity Risk. Cybersecurity failures by
or breaches of the Fund’s Adviser, Subadviser, transfer agent, distributor,
custodian, fund accounting agent or other service providers may disrupt Fund
operations, interfere with the Fund’s ability to calculate its NAV, prevent Fund
shareholders from purchasing, redeeming or exchanging shares or receiving
distributions or receiving timely information regarding the Fund or their
investment in the Fund, cause loss of or unauthorized access to private
shareholder information, and result in financial losses to the Fund and its
shareholders, regulatory fines, penalties, reputational damage, or additional
compliance costs. Substantial costs may be incurred in order to prevent any
cyber incidents in the future. The Fund and its shareholders could be negatively
impacted as a result. New ways to carry out cyber attacks continue to develop.
There is a chance that some risks have not been identified or prepared for, or
that an attack may not be detected, which puts limitations on the Fund’s ability
to plan for or respond to a cyber attack.
These
and other risks are discussed in more detail in “Additional Information About
the Funds’ Investment Objectives, Strategies and Risks” in this Prospectus and
in the Statement of Additional Information.
Performance
The bar chart and the average annual total return
table below provide some indication of the risks of investing in the Fund by
showing how the Fund has performed in the past. The bar chart shows changes in
the performance of the Fund’s Individual Investor Class from year to year. The
table shows how the average annual total return for each class of the Fund for
the 1 and 5 year periods and since inception compare with the returns of the
MSCI World Ex USA Index, a broad measure of market
performance.
The
Fund’s past performance (before and after taxes) does not necessarily indicate
how well it will perform in the future.
Updated performance information is available on the Fund’s website,
www.greencentury.com/fund-performance/,
or by calling 1‑800‑934‑7336.
33
Annual Total Return for
the Year Ended December 31
During
the period shown, the best quarterly
performance of the Fund’s Individual Investor Class was
16.43%, for the quarter ended 12/31/22. The worst quarterly
performance of the Fund’s Individual Investor Class was
-19.51%, for the quarter ended
3/31/20.
As
of September 30, 2023, the
year‑to‑date
return for the Fund’s Individual Investor Class was
3.64%.
Average Annual Total
Returns for the Periods Ended December 31, 2022
|
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| |
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| |
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|
1 Year |
|
|
5 Years |
|
|
Since
Inception (September 30, 2016) |
|
|
|
|
Green Century MSCI International Index Fund –
Individual Investor Class |
|
|
|
| |
|
|
| |
|
|
| |
|
| |
Return
before taxes |
|
|
-21.35 |
% |
|
|
1.24 |
% |
|
|
3.99 |
% |
|
|
| |
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Return
after taxes on distributions |
|
|
‑21.55 |
% |
|
|
0.86 |
% |
|
|
3.61 |
% |
|
|
| |
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Return
after taxes on distributions and sale of Fund shares |
|
|
‑12.50 |
% |
|
|
0.96 |
% |
|
|
3.11 |
% |
|
|
| |
Green Century MSCI International Index Fund –
Institutional Class |
|
|
|
| |
|
|
| |
|
|
| |
|
| |
Return
before taxes |
|
|
-21.11 |
% |
|
|
1.55 |
% |
|
|
4.29 |
% |
|
|
| |
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
MSCI World Ex USA Index (reflects no
deduction for fees, expenses or taxes) |
|
|
-14.29 |
% |
|
|
1.79 |
% |
|
|
4.95 |
% |
|
|
| |
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
34
The after-tax returns are shown for the Individual
Investor Class of the Fund and the after-tax returns for the Institutional Class
of the Fund will vary. The after-tax returns are calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s
tax situation and may differ from those shown. After-tax returns are not
relevant to investors who hold their Fund shares through tax-advantaged
arrangements, such as 401(k) plans or individual retirement
accounts. Returns after taxes on distributions and sale of
fund shares are higher than returns before taxes for certain periods shown
because they reflect the tax benefit of capital losses realized on the sale of
fund shares.
Management
Investment Adviser: Green Century Capital
Management, Inc.
Investment Subadviser: Northern Trust
Investments, Inc. (NTI)
Portfolio Managers: Steven Santiccioli, Vice
President of NTI, and Brent Reeder, Senior Vice President and Director of US
Index Equities at NTI (portfolio managers since 2016) are jointly and primarily
responsible for the day-to-day portfolio management of the Fund.
For
important information on how to buy and sell shares in the Fund, taxes and
financial intermediary compensation, please turn to “Green Century Funds Summary
Section” on page 36 of this Prospectus.
35
GREEN CENTURY FUNDS
SUMMARY SECTION
Purchase and Sale of Fund
Shares
You
may purchase or redeem shares of a Fund by mail using one of the below
addresses, online at www.greencentury.com/open-an-account/, by wire
(instructions are available by calling 1‑800‑221‑5519), or through a financial
intermediary. Investors who have signed up to do so may redeem shares in any
account by calling 1-800-221-5519, and may redeem non-retirement account shares
online at https://greencentury.access-my-account.com. If
you invested through a financial intermediary, contact the intermediary for
information on how to redeem shares. Additional investments may be made online
by investors who have signed up for online services.
|
| |
| |
Mail new account
registration forms, subsequent investments, redemption requests and
other correspondence to: |
|
For registered,
certified or overnight mail, send to: |
Green Century Funds
P.O. Box 588
Portland, ME
04112 |
|
Green
Century Funds
c/o
Apex Fund Services
Three
Canal Plaza, Ground Floor
Portland, ME
04101 |
It
is the Green Century Funds’ policy not to accept accounts that are an investment
option of a government entity’s participant-directed plan or program, as defined
in Rule 206(4)-5 of the Investment Advisors Act of 1940.
You
may purchase or redeem shares of a Fund on any day the New York Stock Exchange
is open.
Individual Investor Class: The minimum initial purchase amount for a
regular investment account is $2,500 per Fund or $1,000 per Fund for investors
who wish to open an account with a $100 or more per month Automatic Investment
Plan. The minimum initial purchase is $1,000 per Fund for Traditional IRAs, Roth
IRAs, SEP-IRAs, SIMPLE IRAs, Coverdell Education Savings Accounts, and Uniform
Gifts or Transfers to Minors Accounts (UGMA/UTMA). The Funds reserve the right
to waive minimums. Institutions as well as individuals may invest in the
Individual Investor Class.
The
minimum additional purchase amount is $100 by check, wire or exchange and $50 by
either an Automatic Investment Plan or online.
Institutional Class: The minimum initial purchase amount is
$250,000 per Fund. The Funds reserve the right to waive minimums. Individuals as
well as institutions who invest $250,000 or more may invest in the Institutional
Class.
The
minimum additional purchase amount is $100 by check, wire or exchange and $50 by
either an Automatic Investment Plan or online.
36
Tax Information
The
Funds’ distributions are generally taxable as ordinary income, qualified
dividend income, or capital gains, unless you are investing through a
tax-advantaged arrangement, such as a 401(k) plan or an individual retirement
account. Such tax-advantaged arrangements may be taxed later upon withdrawal of
monies from those accounts.
Payments to
Broker-Dealers and Other Financial Intermediaries
If
you purchase shares of a Fund through a broker/dealer or other financial
intermediary (such as a bank), the Fund and its related companies may pay the
intermediary for the sale of Fund shares and related services. These payments
create a conflict of interest by influencing the broker/dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s web site for more
information.
37
ADDITIONAL INFORMATION
ABOUT THE FUNDS’ INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
Founded by a partnership of non-profit environmental
and public health advocacy organizations. The Green Century Funds are an
open-end, no-load family of mutual funds that seek to offer to people who care
about a clean, healthy planet the opportunity to use the clout of their
investment dollars to encourage environmentally responsible corporate behavior.
THE GREEN CENTURY
BALANCED FUND
The
Green Century Balanced Fund’s investment objective is to provide capital growth
and income from a diversified portfolio of stocks and bonds which meet the
Fund’s standards for corporate environmental responsibility.
The
Fund invests primarily in the stocks and bonds U.S. companies that the Fund’s
Adviser, Green Century Capital Management, believes are environmentally
responsible and sustainable. The Fund seeks to avoid investing in securities of
issuers in industries that Green Century believes are environmentally dangerous.
There is no predetermined percentage of assets allocated to either stocks or
bonds, although the Fund will generally invest at least 25% of its net assets in
bonds and may not invest more than 75% of its net assets in stocks.
Green
Century applies rigorous selection criteria to identify companies that it
believes are environmentally responsible and sustainable, which may include, but
are not limited to, those that:
|
• |
|
Demonstrate
a commitment to preserving and enhancing the environment as evidenced by
the products they make and the services they
provide; |
|
• |
|
Make
positive contributions toward actively promoting a healthier environmental
future, including companies that produce renewable energy products, help
conserve water, promote sustainable agriculture, and those that offer
effective remedies for existing environmental
problems; |
|
• |
|
Strive
to openly disclose their policies and performance on critical
environmental criteria; |
|
• |
|
Respond
positively to shareholder advocacy on environmental, social and governance
(ESG) issues. |
Green
Century believes that companies that are environmentally responsible and
sustainable may enjoy competitive advantages from cost reductions, quality
improvements, profitability enhancements and access to expanding and new growth
markets. Further, Green Century believes that companies that are responsible
towards the environment are more likely to act ethically and maintain the trust
of their shareholders.
Green
Century believes that environmentally dangerous industries impose harmful costs
on society and the planet and seeks to provide an opportunity to invest in a way
that avoids them; thus at various times the Fund may not be invested in certain
companies and industries Green Century believes threaten a sustainable global
environment and public health. The Balanced Fund does not intend to invest in
companies that primarily:
|
• |
|
Explore
for, extract, produce, manufacture or refine coal, oil or gas or produce
or transmit electricity derived from fossil fuels or transmit natural gas
or have material carbon reserves; |
38
|
• |
|
Are
engaged in the production of nuclear energy or the manufacture of nuclear
equipment to produce nuclear energy or nuclear weapons, in the belief that
these products are unacceptably threatening to a sustainable global
environment; |
|
• |
|
Are
engaged in the manufacture of tobacco products, which are linked to air
pollution, deforestation, and plastic pollution, as well as health
problems; |
|
• |
|
Serve
as factory farms, which pollute our drinking water and overuse medically
important antibiotics; |
|
• |
|
Are
involved in genetically modified organisms (GMOs) whose use has led to
increased use of toxic herbicides; |
|
• |
|
Produce
firearms or military weapons; or |
|
• |
|
Are
engaged in gambling and alcohol. |
Green
Century may refer to the above exclusions as “values-based” or “values-aligned”
screens or exclusions.
The
Balanced Fund’s Subadviser’s equity investment process includes: a
quality-driven research process through which ideas are generated for creating
the Fund’s portfolio, including a thorough analysis and review of
recommendations for the Fund’s portfolio, and a portfolio construction process
led by the insights of the Fund’s portfolio managers that includes a
macroeconomic input and a review of adherence to risk control parameters.
The
Subadviser’s fundamental equity analysts divide coverage by sector and are
responsible for providing in-depth analysis of companies and generating new buy
ideas consistent with the Subadviser’s belief in investing in high quality
companies. The Subadviser conducts a financial and business model review,
evaluating characteristics such as:
|
• |
|
Financial
Returns on Investment |
|
• |
|
Business
Strategy Strength |
|
• |
|
Growth
and Earnings Quality |
|
• |
|
Profitability
and Efficiency |
The
Subadviser seeks to identify companies that it believes are strategic leaders,
based on business models that it thinks are superior and demonstrate the ability
to create consistent earnings growth.
Once
the Subadviser’s analysts determine specific potential investments that look
promising for further research, the analysts begin an in-depth fundamental
research process that includes full integration of ESG issues that are most
material to a particular industry, based on the Subadviser’s assessment that the
issues have both high stakeholder concern and financial risk.
The
Subadviser’s ESG-integrated investment process includes both industry
benchmarking and in-depth company analyses that covers both quantitative and
qualitative considerations. The Subadviser’s industry benchmarking evaluation
uses ESG data weighted according to specific factors deemed by the Subadviser to
have the most financial impact for the industry. The Subadviser’s ESG analysis
evaluates the scope and integrity of a company’s products, policies, and
practices related to ESG issues. The ESG criteria reviewed by the Subadviser
reflect a variety of key sustainability issues that can influence company risks
and opportunities. The ESG criteria implemented by the Subadviser may differ
between industries.
39
In
constructing the Fund’s portfolio, the portfolio managers adhere to specific
risk control parameters. A key step in the portfolio construction process is
sector allocation which is informed by evaluating the current macroeconomic
environment, developing cycles, and trends, based on among other factors the
strategy cycle, valuation, and structural factors. The Balanced Fund’s portfolio
managers integrate the findings of the macroeconomic review into each portfolio
rebalancing process. The resulting sector allocation for the equity component of
the Balanced Fund is based on an integration of this top-down view with the
bottom-up assessment of opportunity at the stock level.
The
Subadviser monitors the companies in the Balanced Fund’s portfolio to determine
if there have been any fundamental changes in the companies or changes in the
companies’ environmental records and policies. The Subadviser also regularly
analyzes quantitative measures such as price/earnings ratios, price/cash flow
ratios and other quantitative measures to monitor stock price movements and help
determine whether to sell a stock in the Fund’s portfolio. The Subadviser may
sell a stock if, among other factors:
|
• |
|
It
subsequently fails to meet the Fund’s investment criteria or becomes
overvalued relative to the long-term expectation for its stock
price; |
|
• |
|
The
balance between the stock’s expected return and its contribution to the
risk of the portfolio deteriorates or a more attractively priced company
is identified; |
|
• |
|
Changes
in national economic conditions, such as interest rates, unemployment, and
productivity levels, prompt a change in industry sector allocation for the
Fund’s portfolio; |
|
• |
|
The
company’s environmentally responsible and sustainable practices, as
identified by Green Century or the Subadviser, no longer avoids investing
in environmentally dangerous industries and dialogue and shareholder
engagement fails to change the company’s
policies. |
The
Balanced Fund may maintain a de minimis position in a stock following the
Subadviser’s decision to sell the holding when Green Century is advocating for
improved corporate environmental policies at the company.
The
bonds the Fund invests in may be of any maturity and are generally of investment
grade quality. In general, fixed income securities are included in the Fund’s
portfolio to balance or offset risks associated with the Fund’s investment in
stocks. Fixed income investments are evaluated using the same environmental
criteria as those employed for equity investments. Issuer-specific financial
evaluation of fixed income investments focuses on an issuer’s cash flow,
interest rate coverage, and other measures of its ability to meet its future
income and principal repayment commitments. In addition, each fixed income
investment is evaluated with respect to its credit quality and its overall
exposure to interest rate risk.
The
Balanced Fund’s assets may be invested in: domestic and foreign securities,
including common stock, preferred stock and other equity securities, exchange
traded funds, bonds and other fixed income securities, Certificates of Deposit,
promissory notes, floating rate obligations, and money market instruments, in
each case, compatible with the Fund’s commitment to environmental
responsibility. The other fixed income securities in which the Fund may invest
include: U.S. Government securities, securities issued by supra‑ national or
foreign domiciled entities, municipal securities, mortgage-backed securities,
asset-backed securities, and zero coupon securities. The Fund may also engage in
writing and purchasing options on portfolio securities. The Fund may, but is not
required to, utilize derivatives, such as equity index and bond futures, in an
effort to reduce risk or increase market exposure, but not to create exposure
greater than the
40
value
of underlying assets held in the Fund. There is no predetermined percentage of
assets allocated to either stocks or bonds, although the Balanced Fund will
generally invest at least 25% of its net assets in fixed income securities
(bonds). The Fund may not invest more than 75% of its net assets in equity
securities (stocks). For temporary defensive purposes, the Fund may invest up to
100% of its assets in cash and other money market and short-term instruments.
Any such temporary defensive investing will also comply with the Fund’s
environmental criteria. The effect of taking such a position is that the Fund
may not achieve its investment objective.
Zero
Coupon Securities. The
Balanced Fund may invest in zero coupon securities which do not make regular
interest payments; rather, they are sold at a discount from face value.
Principal and accrued discount (representing interest accrued but not paid) are
paid at maturity. Zero coupon securities are subject to greater market value
fluctuations from changing interest rates than debt obligations of comparable
maturities which make current cash distributions of interest. Zero coupon
securities are more likely to respond to changes in interest rates than other
securities that have similar maturities and credit quality, and are more
sensitive to the credit quality of the underlying issuer. Unlike bonds that pay
interest throughout the period to maturity, the Fund generally will realize no
cash from a zero coupon security until maturity and, if the issuer defaults, the
Fund may obtain no return at all on its investment. In order to pay cash
distributions representing income on zero coupon securities, the Fund may have
to sell other securities on unfavorable terms. These sales may generate taxable
gains for shareholders.
High
Yield Debt Securities. The Balanced Fund may invest up to 35% of
its net assets in high yield, below investment grade bonds, commonly known as
junk bonds. Below investment grade securities are securities that, at the time
of the investment, are either rated below Baa by a nationally recognized
securities rating organization or, if not rated, considered to be of equivalent
quality by the Subadviser of the Balanced Fund. The Statement of Additional
Information provides a description of bond rating categories. Trillium, the
Subadviser to the Balanced Fund, intends to, but is not required to, limit the
proportion of below investment grade securities to no more than 15% of the
Fund’s net assets. As of July 31, 2023, the Fund had no investments in below
investment grade securities.
While
these securities generally offer higher yields than investment grade securities
with similar maturities, lower-quality securities involve greater risks,
including the possibility of default or bankruptcy. Generally, they are
considered to be predominantly speculative regarding, and more dependent on, the
issuer’s ability to pay interest and repay principal. Such inability (or
perceived inability) would likely lessen the value of such securities, which
could lower the Fund’s net asset value per share. Issuers of high-yield
securities may not be as strong financially as those issuing bonds with higher
credit ratings. Other potential risks associated with investing in high-yield
securities include: heightened sensitivity of highly-leveraged issuers to
adverse economic changes and individual-issuer developments; subordination to
the prior claims of other creditors; adverse publicity and changing investor
perceptions about these securities; and generally less liquid markets. The Fund
may incur additional expenses to the extent that it is required to seek recovery
upon a default in the payment of principal and interest on its holdings. A
holder of securities that are subordinated or “junior” to more senior securities
of an issuer is entitled to payment after holders of more senior securities of
the issuer. As a result, subordinated securities will be disproportionately
adversely affected by a default or even a perceived decline in creditworthiness
of the issuer, or, in the case of a pooled investment, issuers of underlying
obligations. Because of the associated risks, successful investments in
high-yield, high-
41
risk
securities are more dependent on the Subadviser’s credit analysis than generally
would be the case with investments in investment grade securities.
U.S.
Government Securities. The Balanced Fund may invest in U.S.
government securities. U.S. government securities include obligations: directly
issued by or supported by the full faith and credit of the U.S. government, like
Treasury bills, notes and bonds and Government National Mortgage Association
certificates; supported by the right of the issuer to borrow from the U.S.
Treasury, like those of the Federal Home Loan Banks; supported by the
discretionary authority of the U.S. government to purchase the agency’s
securities like those of the Federal National Mortgage Association; or supported
only by the credit of the issuer itself, like the Tennessee Valley Authority.
The U.S. government has provided financial support to the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation in the past,
but there can be no assurance that it will support these or other
government-sponsored enterprises in the future.
Municipal Securities. The Balanced Fund may invest in municipal
securities. Municipal securities include debt obligations issued by any of the
50 U.S. states and the District of Columbia or their political subdivisions,
agencies and public authorities, certain other U.S. governmental issuers (such
as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers,
participation or other interests in these securities and other structured
securities. Although municipal securities are issued by qualifying issuers,
payments of principal and interest on municipal securities may be derived solely
from revenues from certain facilities, mortgages or private industries, and may
not be backed by the issuers themselves. These securities include participation
or other interests in municipal securities issued or backed by banks, insurance
companies and other financial institutions.
Municipal Securities Risk. The municipal bond marketcan be
susceptible to unusual volatility, particularly for lower-rated and unrated
securities. Liquidity can be reduced unpredictably in response to overall
economic conditions or credit tightening. Municipal issuers may be adversely
affected by rising health care costs, increasing unfunded pension liabilities,
and by the phasing out of federal programs providing financial support.
Unfavorable conditions and developments relating to projects financed with
municipal securities can result in lower revenues to issuers of municipal
securities, potentially resulting in defaults. Issuers often depend on revenues
from those projects to make principal and interest payments. The value of
municipal securities can also be adversely affected by changes in the financial
condition of one or more individual municipal issuers or insurers of municipal
issuers, regulatory and political developments, tax law changes or other
legislative actions, and by uncertainties and public perceptions concerning
these and other factors. Municipal issuers may be more susceptible to downgrades
or defaults during recessions or similar periods of economic stress. Financial
difficulties of municipal issuers may continue or worsen particularly in the
event of political, economic or market turmoil or a recession.
Mortgage-Backed Securities. The Balanced Fund may invest in
mortgage-backed or mortgage-related securities. Mortgage-related securities may
be issued by private companies or by agencies of the U.S. government and
represent direct or indirect participation in, or are collateralized by and
payable from, mortgage loans secured by real property. Unlike mortgage-related
securities issued or guaranteed by the U.S. government or its agencies and
instrumentalities, mortgage-related securities issued by private issuers do not
have a government or government-sponsored entity guarantee (but may have other
credit
42
enhancement),
and may, and frequently do, have less favorable collateral, credit risk or other
underwriting characteristics.
Risks
of Mortgage-Backed Securities. Mortgage-related securities are subject to
special risks. The repayment of certain mortgage-related securities depends
primarily on the cash collections received from the issuer’s underlying asset
portfolio and, in certain cases, the issuer’s ability to issue replacement
securities (such as asset-backed commercial paper). As a result, there could be
losses to the Balanced Fund in the event of credit or market value deterioration
in the issuer’s underlying portfolio, mismatches in the timing of the cash flows
of the underlying asset interests and the repayment obligations of maturing
securities, or the issuer’s inability to issue new or replacement securities.
This is also true for other asset-backed securities. Upon the occurrence of
certain triggering events or defaults, the Balanced Fund may become the holder
of underlying assets at a time when those assets may be difficult to sell or may
be sold only at a loss. In the event of a default, the value of the underlying
collateral may be insufficient to pay certain expenses, such as litigation and
foreclosure expenses, and inadequate to pay any principal or unpaid interest.
The risk of default is generally higher in the case of mortgage-backed
investments offered by private issuers and those that include so-called
“sub-prime” mortgages. Privately issued mortgage-backed and asset-backed
securities are not traded on an exchange and may have a limited market. Without
an active trading market, these securities may be particularly difficult to
value given the complexities in valuing the underlying collateral. Certain debt
instruments may pay principal only at maturity or may represent only the right
to receive payments of principal or interest on the underlying obligations, but
not both. The value of these types of instruments may change more drastically
than debt securities that pay both principal and interest during periods of
changing interest rates. Principal only instruments generally increase in value
if interest rates decline, but are also subject to the risk of prepayment.
Interest only instruments generally increase in value in a rising interest rate
environment when fewer of the underlying obligations are prepaid, but remain
subject to prepayment risk, which would be a loss of any expected interest
payments, even though there is no default on the underlying financial asset.
Derivatives. The Balanced Fund may, but is not required
to, utilize derivatives, such as equity index and bond futures. Using
derivatives such as futures can increase Fund losses and reduce opportunities
for gains when market prices, interest rates or the derivative instruments
themselves behave in a way not anticipated by the Fund. Using derivatives also
can have a leveraging effect and increase fund volatility. Certain derivatives
have the potential for unlimited loss, regardless of the size of the initial
investment. Derivatives may be difficult to sell, unwind or value, and the
counterparty may default on its obligations to the Fund. Many over-the-counter
derivative instruments will not have liquidity beyond the counterparty to the
instrument. Use of derivatives or similar instruments may have different tax
consequences for the Fund than an investment in the underlying security, and
those differences may affect the amount, timing and character of income
distributed to shareholders. The Fund’s use of derivatives may also increase the
amount of taxes payable by shareholders. Derivatives may not be available on
terms that make economic sense (for example, they may be too costly). Risks
associated with the use of derivatives are magnified to the extent that a large
portion of the Fund’s assets are committed to derivatives in general or are
invested in just one or a few types of derivatives. The U.S. government and
foreign governments are in the process of adopting and implementing regulations
governing derivative markets, including mandatory clearing of certain
derivatives, margin, and reporting requirements. The ultimate impact of the
regulations remains unclear. Additional regulations may make using derivatives
costlier, may limit their availability or utility or
43
otherwise
adversely affect their performance or may disrupt markets. The Fund may choose
not to make use of derivatives for a variety of reasons, and any use may be
limited by applicable law and regulations.
THE GREEN CENTURY EQUITY
FUND
The
Green Century Equity Fund’s investment objective is to achieve long-term total
return which matches the performance of an index of the stocks of companies
selected based on environmental, social and corporate governance criteria.
The
Equity Fund invests substantially all of its assets in the common stocks
comprising the KLD400 ex Fossil Fuels Index, a custom index calculated by MSCI
Inc. The KLD400 ex Fossil Fuels Index is comprised of the common stocks of the
approximately 400 companies in the MSCI KLD 400 Social Index (the KLD400 Index),
minus the stocks of the companies MSCI determines that explore for, extract,
produce, manufacture or refine coal, oil or gas or produce or transmit
electricity derived from fossil fuels or transmit natural gas or have carbon
reserves. (the Fossil Fuel Free Screen) Companies included in the KLD400 Index
are identified based on a review of ESG ratings; the KLD400 Index is composed of
companies with what MSCI calculates to have high ESG ratings.
MSCI
ESG Research’s process in constructing the KLD400 Index includes the
identification of the following key ESG issues by industry, measuring a
company’s risk exposure for each key issue, and measuring a company’s risk
management for each key issue:
|
• |
|
Environmental
issues, including: |
|
- |
Climate
Change: carbon emissions; product carbon footprint; financing
environmental impact; and climate change
vulnerability. |
|
- |
Natural
Capital: water stress; biodiversity and land use; and raw material
sourcing. |
|
- |
Pollution
and Waste: toxic emissions and waste; packaging material and waste; and
electronic waste. |
|
- |
Environmental
Opportunities: clean technology; green building; and renewable
energy. |
|
• |
|
Social
issues, including: |
|
- |
Human
Capital: labor management; health and safety; human capital development;
and supply chain labor standards. |
|
- |
Product
Liability: product safety and quality; chemical safety; financial product
safety; privacy and data security; responsible investment; and insuring
health and demographic risk. |
|
- |
Stakeholder
Opposition: controversial sourcing. |
|
- |
Social
Opportunities: access to communication; access to finance; access to
health care; and opportunities in nutrition and
health. |
|
• |
|
Governance
issues, including: |
|
- |
Corporate
Governance: board; pay; ownership and
accounting. |
|
- |
Corporate
Behavior: business ethics; anti-competitive practices; corruption and
instability; financial system instability; and tax
transparency. |
44
Companies
that MSCI ESG Research has determined to have significant business involvement
in the following will not be included in the KLD400 Index:
|
• |
|
Companies
that are primarily engaged in the production of nuclear energy or the
manufacture of nuclear equipment to produce nuclear energy or nuclear
weapons, in the belief that these products are unacceptably threatening to
a sustainable global environment. |
|
• |
|
Companies
that are primarily engaged in the manufacture of tobacco products, which
are linked to air pollution, deforestation, and plastic pollution, as well
as health problems. |
|
• |
|
Companies
that have a significant business involvement in genetically modified
organisms (GMOs) whose use has led to increased use of toxic
herbicides. |
|
• |
|
Companies
that are in industries that produce firearms or military
weapons. |
|
• |
|
Companies
that are primarily engaged in gambling, alcohol or adult
entertainment. |
In
addition, the Fund will not invest in companies that are determined not to be
fossil fuel free using analytics provided by As You Sow. As You Sow is an
independent non-profit organization that provides Mutual Fund analytic tools and
promotes environmental and social corporate responsibility.
We
may refer to the above exclusions as well as the MSCI and As You Sow fossil fuel
free screens as “values-based” or “values-aligned” screens and exclusions.
The
KLD400 Index seeks to maintain broad sector representation. The weightings of
the stocks comprising the KLD400 Index are based upon float-adjusted market
capitalization. The composition of the KLD400 Index is reviewed on a regular
quarterly basis, following which companies can be added to the KLD400 Index.
During the quarterly reviews, companies are evaluated to determine if any should
be removed from the KLD400 Index due to deteriorated environmental, social or
governance performance or due to removal from the applicable MSCI universe.
Deleted companies are replaced with eligible companies and the KLD400 Index will
be restored to 400 companies following each quarterly review. As of each
quarterly restoration of the KLD400 Index, MSCI ESG Research will remove the
companies in the KLD400 Index that explore for, extract, produce, manufacture or
refine coal, oil or gas or produce or transmit electricity derived from fossil
fuels or transmit natural gas or have carbon reserves to create the KLD400 ex
Fossil Fuels Index. The criteria used in developing and maintaining both the
KLD400 Index and the KLD400 ex Fossil Fuels Index involve subjective judgment by
MSCI. The Equity Fund is not managed in the traditional investment sense, since
changes in the composition of its securities holdings are made in order to track
the changes in the composition of securities included in the KLD400 ex Fossil
Fuels Index.
The
Equity Fund may invest cash reserves in high quality short-term debt securities
issued by agencies or instrumentalities of the United States Government,
bankers’ acceptances, commercial paper, certificates of deposit, bank deposits
or repurchase agreements provided that the issuer satisfies Green Century’s
social criteria. The Equity Fund’s policy is to hold its assets in such
securities pending readjustment of its holdings of stocks comprising the KLD400
ex Fossil Fuels Index and in order to meet anticipated redemption requests. The
Equity Fund may also invest in such securities for temporary defensive purposes.
This may adversely affect the Equity Fund’s performance.
The
Equity Fund buys and sells stocks so that the composition of its securities
holdings will correspond, to the extent reasonably practicable, to the
composition of securities in the KLD400 ex Fossil Fuels Index.
45
The
timing and extent of adjustments in the holdings of the Equity Fund, and the
extent of the correlation of the holdings of the Equity Fund with the KLD400 ex
Fossil Fuels Index, reflects the judgment of the Equity Fund’s Subadviser as to
the appropriate balance between the goal of correlating the holdings of the
Equity Fund with the composition of the KLD400 ex Fossil Fuels Index, and the
goals of minimizing transaction costs and keeping sufficient reserves available
for anticipated redemptions from the Equity Fund. The weightings of the stocks
in the KLD400 ex Fossil Fuels Index are based on float-adjusted market
capitalizations, which means the largest companies comprise a higher percentage
of the KLD400 ex Fossil Fuels Index and the Index is more heavily weighted in
large than in small companies. As of September 30, 2023, large-cap U.S.
companies (defined as companies with market capitalizations of over $10 billion)
represented approximately 97.4% of the market value of the investments of the
Fund. To the extent practicable, the Equity Fund will seek a correlation between
the weightings of securities held by the Equity Fund and the weightings of the
securities in the KLD400 ex Fossil Fuels Index of 0.95 or better. A figure of
1.00 would indicate a perfect correlation. The Equity Fund’s ability to
duplicate the performance of the KLD400 ex Fossil Fuels Index will depend to
some extent on the size and timing of cash flows into and out of the Equity Fund
as well as the Equity Fund’s expenses. The Fund may be required to deviate its
investments from the securities and relative weightings of the Index to comply
with certain regulatory limitations, including diversification requirements
under the 1940 Act and the Internal Revenue Code of 1986, as amended.
Under
normal circumstances and as a matter of operating policy, the Fund will invest
at least 80% of its assets in equity securities and related investments. The
Fund will provide shareholders with at least 60 days’ notice of any change to
its 80% investment policy.
THE GREEN CENTURY
INTERNATIONAL INDEX FUND
The
Green Century International Index Fund’s investment objective is to achieve
long-term total return which matches the performance of an index of the stocks
of foreign companies selected based on environmental, social and corporate
governance criteria.
The
International Index Fund invests substantially all of its assets in the common
stocks which make up the World ex USA SRI ex Fossil Fuels Index, a custom index
calculated by MSCI Inc. The World ex USA SRI ex Fossil Fuels Index is comprised
of the common stocks of the companies in the MSCI World ex USA SRI Index (the
World ex USA SRI Index), minus the stocks of the companies MSCI determines that
explore for, extract, produce, manufacture or refine coal, oil or gas or produce
or transmit electricity derived from fossil fuels or transmit natural gas or
have carbon reserves. (the Fossil Fuels Free Screen) The World ex USA SRI Index
includes large and mid-cap stocks from approximately 22 developed markets
countries (excluding the U.S.). The World ex USA SRI Index is a capitalization
weighted index that provides exposure to companies with what MSCI calculates to
have high ESG ratings.
MSCI
ESG Research’s process in constructing the World ex USA SRI Index includes the
identification of the following key ESG issues by industry, measuring a
company’s risk exposure for each key issue, and measuring a company’s risk
management for each key issue:
|
• |
|
Environmental
issues, including: |
|
- |
Climate
Change: carbon emissions; product carbon footprint; financing
environmental impact; and climate change
vulnerability. |
46
|
- |
Natural
Capital: water stress; biodiversity and land use; and raw material
sourcing. |
|
- |
Pollution
and Waste: toxic emissions and waste; packaging material and waste; and
electronic waste. |
|
- |
Environmental
Opportunities: clean technology; green building; and renewable
energy. |
|
• |
|
Social
issues, including: |
|
- |
Human
Capital: labor management; health and safety; human capital development;
and supply chain labor standards. |
|
- |
Product
Liability: product safety and quality; chemical safety; financial product
safety; privacy and data security; responsible investment; and insuring
health and demographic risk. |
|
- |
Stakeholder
Opposition: controversial sourcing. |
|
- |
Social
Opportunities: access to communication; access to finance; access to
health care; and opportunities in nutrition and
health. |
|
• |
|
Governance
issues, including: |
|
- |
Corporate
Governance: board; pay; ownership and
accounting. |
|
- |
Corporate
Behavior: business ethics; anti-competitive practices; corruption and
instability; financial system instability; and tax
transparency. |
Companies
that MSCI ESG Research has determined to have significant business involvement
in the following will not be included in the World ex USA SRI Index:
|
• |
|
Companies
that are primarily engaged in the production of nuclear energy or the
manufacture of nuclear equipment to produce nuclear energy or nuclear
weapons, in the belief that these products are unacceptably threatening to
a sustainable global environment. |
|
• |
|
Companies
that are primarily engaged in the manufacture of tobacco products, which
are linked to air pollution, deforestation, and plastic pollution, as well
as health problems. |
|
• |
|
Companies
that have a significant business involvement in genetically modified
organisms (GMOs) whose use has led to increased use of toxic
herbicides. |
|
• |
|
Companies
that are in industries that produce firearms or military
weapons. |
|
• |
|
Companies
that are primarily engaged in gambling, alcohol or adult
entertainment. |
In
addition, the Fund will not invest in companies that are determined not to be
fossil fuel free using
analytics
provided by As You Sow. As You Sow is an independent non-profit organization
that provides
Mutual
Fund analytic tools and promotes environmental and social corporate
responsibility.
We
may refer to the above exclusions as well as the MSCI and As You Sow fossil fuel
free screens as
“values-based”
or “values-aligned” screens and exclusions.
The
World ex USA SRI Index seeks to maintain broad sector representation. The
weightings of the stocks comprising the World ex USA SRI Index are based upon
float-adjusted market capitalization. The composition of the World ex USA SRI
Index is reviewed on a regular basis in May and rebalanced in May, August,
November and February. During the reviews, the companies that comprise the World
ex USA SRI Index are evaluated to determine if any should be removed due to
deteriorated environmental, social or governance performance. Existing
constituents that do meet the eligibility criteria are retained in the World ex
USA SRI Index. The criteria used in developing and maintaining both the World ex
USA SRI Index and the World ex USA SRI ex Fossil Fuels Index involve subjective
judgment by MSCI. The International Index
47
Fund
is not managed in the traditional investment sense, since changes in the
composition of its securities holdings are made in order to track the changes in
the composition of securities included in the World ex USA SRI ex Fossil Fuels
Index. The World ex USA SRI ex Fossil Fuels Index is a capped version of the
World ex USA SRI Index that limits company concentration by constraining the
maximum weight of a company to 5% of the index.
The
MSCI Global SRI Indexes, including the World ex USA SRI Index, are constructed
by applying a combination of values based exclusions and a Best in Sector
selection process to companies in the regional indexes that make up MSCI ACWI
(All Country World Index), a global equity index consisting of developed and
emerging market countries. After securities involved in GMOs, firearms, military
weapons, nuclear power, alcohol, tobacco, adult entertainment and gambling are
excluded, MSCI’s Best in Sector selection process is applied to the remaining
eligible securities in the selection universe. The MSCI Global SRI Indexes
target sector and region weights consistent with those of the underlying
indexes. The methodology aims to include the securities of companies with the
highest ESG ratings making up 25% of the market capitalization in each sector
and region of the parent indexes. The selection universe for the MSCI Global SRI
Indexes is the constituents of the MSCI Global Investable Market Indexes.
The
International Index Fund may invest cash reserves in high quality short-term
debt securities issued by agencies or instrumentalities of the United States
Government, bankers’ acceptances, commercial paper, certificates of deposit,
bank deposits or repurchase agreements provided that the issuer satisfies Green
Century’s ESG criteria. The International Index Fund’s policy is to hold its
assets in such securities pending readjustment of its holdings of stocks
comprising the World ex USA SRI ex Fossil Fuels Index and in order to meet
anticipated redemption requests. The International Index Fund may also invest in
such securities for temporary defensive purposes. This may adversely affect the
International Index Fund’s performance.
The
International Index Fund buys and sells stocks periodically so that the
composition of its securities holdings will correspond, to the extent reasonably
practicable, to the composition of securities in the World ex USA SRI ex Fossil
Fuels Index. The timing and extent of adjustments in the holdings of the
International Index Fund, and the extent of the correlation of the holdings of
the International Index Fund with the World ex USA SRI ex Fossil Fuels Index,
reflects the judgment of the International Index Fund’s Subadviser as to the
appropriate balance between the goal of correlating the holdings of the
International Index Fund with the composition of the World ex USA SRI ex Fossil
Fuels Index, and the goals of minimizing transaction costs and keeping
sufficient reserves available for anticipated redemptions from the International
Index Fund. The weightings of the stocks in the World ex USA SRI ex Fossil Fuels
Index are based on float-adjusted market capitalizations, which means the
largest companies comprise a higher percentage of the World ex USA SRI ex Fossil
Fuels Index and the Index is more heavily weighted in large than in smaller
companies. As of September 30, 2023, the World ex USA SRI ex Fossil Fuels Index
included companies with market capitalizations between approximately $1.6
billion and $209 billion. To the extent practicable, the International Index
Fund will seek a correlation between the weightings of securities held by the
International Index Fund and the weightings of the securities in the World ex
USA SRI ex Fossil Fuels Index of 0.95 or better. A figure of 1.00 would indicate
a perfect correlation. The International Index Fund’s ability to duplicate the
performance of the World ex USA SRI ex Fossil Fuels Index will depend to some
extent on the size and timing of cash flows into and out of the International
Index Fund as well as the International Index Fund’s expenses. The Fund may be
required to deviate its investments from the securities and relative
48
weightings
of the Index to comply with certain regulatory limitations, including
diversification requirements under the 1940 Act and the Internal Revenue Code of
1986, as amended.
The
Fund may, but is not required to, purchase and sell forward foreign currency
exchange contracts in non-U.S. currencies in connection with its investments,
including as a means of managing relative currency exposure. The Fund may not
fully benefit from or may lose money on forward foreign currency transactions if
changes in currency rates do not occur as anticipated or do not correspond
accurately to changes in the value of the Fund’s holdings, or if the
counterparty defaults. Such transactions may also prevent the fund from
realizing profits on favorable movements in exchange rates. Risk of counterparty
default is greater for counterparties located in emerging markets.
Using
derivatives such as forward foreign currency exchange contracts can increase
Fund losses and reduce opportunities for gains when market prices, interest
rates or the derivative instruments themselves behave in a way not anticipated
by the Fund. Using derivatives also can have a leveraging effect and increase
fund volatility. Certain derivatives have the potential for unlimited loss,
regardless of the size of the initial investment. Derivatives may be difficult
to sell, unwind or value, and the counterparty may default on its obligations to
the Fund. Many over-the-counter derivative instruments will not have liquidity
beyond the counterparty to the instrument. Use of derivatives or similar
instruments may have different tax consequences for the Fund than an investment
in the underlying security, and those differences may affect the amount, timing
and character of income distributed to shareholders. The Fund’s use of
derivatives may also increase the amount of taxes payable by shareholders.
Derivatives may not be available on terms that make economic sense (for example,
they may be too costly). Risks associated with the use of derivatives are
magnified to the extent that a large portion of the Fund’s assets are committed
to derivatives in general or are invested in just one or a few types of
derivatives. The U.S. government and foreign governments are in the process of
adopting and implementing regulations governing derivative markets, including
mandatory clearing of certain derivatives, margin, and reporting requirements.
The ultimate impact of the regulations remains unclear.
Under
normal circumstances and as a matter of operating policy, the Fund will invest
at least 80% of its assets in the component securities of the World ex USA SRI
ex Fossil Fuels Index and may invest in American Depository Receipts, Global
Depository Receipts and Euro Depository Receipts representing the component
securities of the Index. The Fund will provide shareholders with at least 60
days’ notice of any change to its 80% investment policy.
THE GREEN CENTURY FUNDS
Foreign Securities. While each of the
Balanced Fund and the Equity Fund emphasizes investment in U.S. companies, they
may also invest in foreign securities. The Balanced Fund may invest up to 30% of
its assets in foreign securities of the same types as the domestic securities in
which the Fund may invest. The Funds may also invest in American Depositary
Receipts (ADRs) and the Balanced Fund may invest in Global Depositary Receipts
(GDRs) with respect to such foreign securities. The Balanced Fund may also
invest in certificates of deposit issued by foreign banks, foreign and domestic
branches of U.S. banks, obligations issued or guaranteed by foreign governments
or political subdivisions thereof, obligations issued by supra-national
organizations, and corporate bonds denominated in dollars but issued by foreign
companies.
49
The
International Index Fund invests substantially all its assets in foreign
securities. The Fund may also invest in American Depositary Receipts (ADRs), in
Global Depositary Receipts (GDRs) and Euro Depository Receipts with respect to
such foreign securities.
Foreign
securities involve some special risks, such as exposure to potentially adverse
local political and economic developments; nationalization and exchange
controls; potentially lower liquidity and higher volatility; possible problems
arising from accounting, disclosure, settlement, and regulatory practices that
differ from U.S. standards; and the chance that fluctuations in foreign exchange
rates will decrease the investment’s value (favorable changes can increase its
value). Foreign investments must be made in compliance with U.S. and foreign
currency restrictions and laws restricting the amounts and types of foreign
investments.
Portfolio Turnover. Purchases and sales
are made for a portfolio whenever necessary, in management’s opinion, to meet
its investment objective. Higher levels of activity result in higher transaction
costs and may also result in higher taxable capital gains distributions to
shareholders. The Balanced Fund’s portfolio turnover rate for the fiscal years
ended July 31, 2021, 2022 and 2023 were 17%, 9% and 21%, respectively.
Frequent
changes in the Equity Fund’s holdings may result from the policy of attempting
to correlate the Equity Fund’s securities holdings with the composition of the
KLD400 ex Fossil Fuels Index. The portfolio turnover rate of the Equity Fund for
the fiscal years ended July 31, 2021, 2022 and 2023 were 9%, 5% and 4%,
respectively.
Frequent
changes in the International Index Fund’s holdings may result from the policy of
attempting to correlate the International Index Fund’s securities holdings with
the composition of the World ex USA SRI ex Fossil Fuels Index. The portfolio
turnover rate of the of the International Index Fund for the fiscal years ended
July 31, 2021, 2022 and 2023 were 31%, 29% and 42%, respectively.
Investment Restrictions. None of the Funds
intends to concentrate its investments (i.e. invest more than 25% of its assets)
in a particular industry. However, because the Equity Fund and the International
Index Fund each generally invests substantially all its assets in the component
securities of the KLD400 ex Fossil Fuels Index and the World ex USA ex Fossil
Fuels Index, respectively, if stocks in a single industry comprise more than 25%
of an Index, the Equity Fund and the International Index Fund will invest more
than 25% of its assets in that industry. If the Equity Fund or the International
Index Fund were to concentrate its investments in a single industry, the Equity
Fund or the International Index Fund would be more susceptible to risks
associated with that industry than would a fund which was not so concentrated.
The
investment objectives of the Balanced Fund, the Equity Fund and the
International Index Fund are not fundamental and may be changed without the
approval of shareholders if written notice is provided to shareholders prior to
implementing the change. Because of the risks inherent in all investments, there
can be no assurance that the objectives of the Funds will be met. Except as
stated otherwise, all investment guidelines, policies and restrictions described
here and in the Statement of Additional Information are non- fundamental.
Portfolio Holdings Disclosure. The Funds have
adopted policies and procedures which govern the timing and circumstances of
disclosure to shareholders and third parties of information regarding the
portfolio investments held by each of the Funds. The Policies and Procedures for
the Disclosure of the Green Century Funds’ Portfolio Holdings is included in the
Statement of Additional Information.
50
ENVIRONMENTALLY
RESPONSIBLE INVESTING
Green
Century Capital Management’s mission is to promote corporate environmental
responsibility and to foster a sustainable economy. The three-prong strategy to
achieve these goals:
|
• |
|
Sponsor
mutual funds which strive to avoid environmentally dangerous companies and
invest in environmentally responsible and sustainable
companies. |
|
• |
|
Advocate
for more environmentally responsible policies and practices at major
corporations |
|
• |
|
Support
the non-profit public interest and advocacy organizations that founded
Green Century |
ADVOCATES FOR CORPORATE
ENVIRONMENTAL RESPONSIBILITY
Green
Century Capital Management believes that shareholder advocacy is a critical
component of environmentally responsible investing and are actively involved in
advocating for greater corporate environmental accountability.
Green
Century Capital Management advocates for more environmentally responsible
policies at the companies in which the Funds invest, as well as at companies in
which none of the Funds has invested.
Green
Century Capital Management holds dialogues with companies and files shareholder
resolutions in an effort to create positive environmental change. Green Century
Capital Management works to preserve and protect threatened ecosystems; advocate
for more renewable energy and greenhouse gas emissions goals and reduce plastic
pollution.
Green
Century Capital Management is committed to pursuing demands for improved
corporate environmental responsibility and to fostering a sustainable
economy.
THE GREEN CENTURY FUNDS
SUPPORT NOT-FOR-PROFIT ADVOCACY ORGANIZATIONS
The
Green Century Funds were founded by non-profit environmental advocacy
organizations. Unlike other investment advisers and administrators that are
privately owned for the benefit of individuals or for-profit corporations, Green
Century Capital Management is owned by Paradigm Partners, a California general
partnership, the partners of which are all not-for-profit advocacy
organizations. This means that 100% of the net profits earned by Green Century
Capital Management on the fees it receives for managing the Funds belong to
these not-for-profit advocacy organizations. These revenues will be used to
support public interest campaigns, such as such as seeking to reduce the use of
plastics, seeking to stop the use of dangerous pesticides, advocating for
consumer’s right to repair products, seeking to reduce dangers to children’s
health such as toxic chemicals and unsafe products, working for improved public
transportation, advocating for public health protections, including the overuse
of antibiotics, and championing consumer protection and corporate
accountability.
The
organizations which founded and own Green Century Capital Management are:
California Public Interest Research Group (CALPIRG), Citizen Lobby of New Jersey
(NJPIRG), Colorado Public Interest Research Group (COPIRG), ConnPIRG Citizen
Lobby, Fund for the Public Interest, Massachusetts Public
51
Interest
Research Group (MASSPIRG), MOPIRG Citizen Organization, PIRGIM Public Interest
Lobby, and Washington State Public Interest Research Group (WASHPIRG). Green
Century is the only mutual fund company founded and owned by environmental
non-profits, making it a pioneer in impact investing.
Green
Century Capital Management may also provide grant and other funding to
non-profit advocacy organizations to support their campaign work on wilderness
protection, environmental protection, clean energy and other issues.
MANAGEMENT OF THE GREEN
CENTURY FUNDS
THE GREEN CENTURY
BALANCED FUND
Investment Adviser. Green Century
Capital Management, 114 State Street, Suite 200, Boston, Massachusetts 02109, is
the investment adviser for the Balanced Fund and oversees the portfolio
management of the Balanced Fund on a day-to-day basis. Green Century Capital
Management’s role is to ensure that the Balanced Fund’s investment objective and
environmental and investment policies are accurately and effectively
implemented. Green Century Capital Management has served as investment adviser
and administrator for the Balanced Fund since the commencement of operations of
the Balanced Fund.
Investment Subadviser. Trillium Asset
Management LLC (Trillium), Two Financial Center, Boston, Massachusetts 02111,
serves as the Subadviser for the Balanced Fund. Trillium is a wholly owned
subsidiary of Perpetual US Holding Company, a subsidiary of Perpetual Limited.
Perpetual Limited is a diversified financial services company that has been
serving Australians since 1886. Trillium conducts the day-to-day investment
management for the Fund consistent with the guidelines set by Green Century
Capital Management. Trillium conducts fundamental security analysis that
integrates ESG information.
Trillium
has managed investments in environmentally and socially responsible companies
since 1982. As of September 30, 2023, Trillium had approximately $4.5 billion in
assets under management. Trillium is paid by the Adviser (not the Fund).
A
team of three portfolio managers and a Fixed Income Analyst at Trillium are
jointly responsible for the day-to-day portfolio management of the Balanced
Fund. The team is comprised of Cheryl Smith, CFA, Ph.D.; Matthew Patsky, CFA;
Paul Hilton, CFA; and Cyrus McMillan the Fixed Income Analyst (effective
December 31, 2023, Mr. McMillan will become a member of the portfolio
manager team). Ms. Smith has been with Trillium for over 30 years;
Mr. Patsky joined Trillium in 2009; Mr. Hilton joined Trillium in 2011 and
Cyrus McMillan joined in 2016. Ms. Smith has served as a portfolio manager
of the Balanced Fund since 2005. Mr. Patsky has served as a portfolio
manager of the Balanced Fund since 2009. Mr. Hilton has served as a portfolio
manager of the Balanced Fund since 2018. The Statement of Additional Information
contains additional information about Ms. Smith, Mr. Patsky, Mr. Hilton and Mr.
McMillan and their compensation, other accounts they manage, and their ownership
of shares of the Balanced Fund.
Discussions
regarding the basis of the Board of Trustees’ approval of the continuance of the
Balanced Fund’s Investment Advisory Agreement with Green Century Capital
Management and Investment Subadvisory
52
Agreement
with Trillium are available in the Balanced Fund’s Semi-Annual Report to
shareholders for the fiscal period ending January 31, 2023.
Fees. For the services
Green Century Capital Management and Trillium provide the Balanced Fund, they
receive a total of 0.65% of the average daily net assets of the Fund up to $250
million and 0.60% of the average daily net assets of the Fund in excess of $250
million. For the services Green Century Capital Management and Trillium provided
the Balanced Fund during the fiscal year ended July 31, 2023, they received
a total of 0.63% of the average daily net assets of the Fund.
THE GREEN CENTURY EQUITY
FUND
Investment Adviser. Green Century
Capital Management is the investment adviser for the Equity Fund and oversees
the portfolio management of the Equity Fund on a day-to-day basis. Green Century
Capital Management’s role is to ensure that the Equity Fund’s investment
objective and environmental, social, governance and investment policies are
accurately and effectively implemented. Green Century Capital Management has
served as the Equity Fund’s investment adviser since 2006 and as the
administrator of the Equity Fund since the commencement of operations of the
Equity Fund.
Investment Subadviser. Northern Trust
Investments, Inc. (NTI), 50 South LaSalle Street, Chicago, IL 60603, a
subsidiary of Northern Trust Corporation, serves as the Subadviser for the
Equity Fund. NTI is an Illinois State Banking Corporation and an investment
adviser registered under the Investment Advisers Act of 1940, as amended. It
primarily manages assets for institutional and individual separately managed
accounts, investment companies and bank common and collective funds. Northern
Trust Corporation is regulated by the Board of Governors of the Federal Reserve
System as a financial holding company under the U.S. Bank Holding Company Act of
1956, as amended.
NTI
conducts the day-to-day investment management for the Fund consistent with the
guidelines set by Green Century Capital Management. NTI determines what
securities shall be purchased, sold or exchanged to track the composition of the
KLD400 ex Fossil Fuels Index. NTI does not determine the composition of the
KLD400 ex Fossil Fuels Index.
As
of September 30, 2023, Northern Trust Corporation, through its affiliates, had
approximately $1.3 trillion in assets under management. NTI is paid by the
Adviser (not the Fund).
The
Portfolio Manager of the Equity Fund is Brent Reeder, Senior Vice President and
Senior Portfolio Manager of NTI. Mr. Reeder has been manager of the Fund
since November 29, 2010. He is primarily responsible for the day-to-day
investment management of the Fund. Mr. Reeder has been employed as a
portfolio manager with NTI since 1993. Since then, he has been a portfolio
manager in the quantitative management group and is responsible for the
management of various equity and equity index portfolios. The Statement of
Additional Information contains additional information about Mr. Reeder,
his compensation, other accounts he manages, and his ownership of shares of the
Equity Fund.
53
Discussions
regarding the basis of the Board of Trustees’ approval of the continuance of the
Equity Fund’s Investment Advisory Agreement with Green Century Capital
Management and Investment Subadvisory Agreement with NTI are available in the
Equity Fund’s Semi-Annual Report to shareholders for the fiscal period ended
January 31, 2023.
Disclosures Pertaining to the MSCI KLD 400 Social ex
Fossil Fuels Index. The Green Century
Equity Fund (the “Fund”) is not sponsored, endorsed, or promoted by MSCI, its
affiliates, information providers or any other third party involved in, or
related to, compiling, computing or creating the MSCI indices (the “MSCI
Parties”), and the MSCI Parties bear no liability with respect to the Fund or
any index on which the Fund is based. The MSCI Parties are not sponsors of the
Fund and are not affiliated with the Fund in any way. The Statement of
Additional Information contains a more detailed description of the limited
relationship the MSCI Parties have with Green Century Capital Management and the
Fund.
Fees. For the services
Green Century Capital Management and NTI provide to the Equity Fund, they
receive a total of 0.25% of the average daily net assets of the Fund up to but
not including $100 million, 0.22% of the average daily net assets of the Fund
from and including $100 million up to but not including $500 million, 0.17% of
the average daily net assets of the Equity Fund from and including $500 million
up to but not including $1 billion, and 0.12% of the average daily net assets of
the Equity Fund equal to or in excess of $1 billion, computed and accrued daily.
For the services Green Century Capital Management and NTI provided to the Equity
Fund during the fiscal year ended July 31, 2023, they received a total of
0.23% of the average daily net assets of the Fund.
GREEN CENTURY
INTERNATIONAL INDEX FUND
Investment Adviser. Green Century
Capital Management is the investment adviser for the International Index Fund
and oversees the portfolio management of the International Index Fund on a
day-to-day basis. Green Century Capital Management’s role is to ensure that the
International Index Fund’s investment objective and environmental, social,
governance and investment policies are accurately and effectively implemented.
Green Century Capital Management has served as the International Index Fund’s
investment adviser and administrator since the commencement of operations of the
International Index Fund.
Investment Subadviser. Northern Trust
Investments, Inc. (NTI), 50 South LaSalle Street, Chicago, IL 60603, a
subsidiary of Northern Trust Corporation, serves as the Subadviser for the
International Index Fund. NTI is an Illinois State Banking Corporation and an
investment adviser registered under the Investment Advisers Act of 1940, as
amended. It primarily manages assets for institutional and individual separately
managed accounts, investment companies and bank common and collective funds.
Northern Trust Corporation is regulated by the Board of Governors of the Federal
Reserve System as a financial holding company under the U.S. Bank Holding
Company Act of 1956, as amended.
NTI
conducts the day-to-day investment management for the Fund consistent with the
guidelines set by Green Century Capital Management. NTI determines what
securities shall be purchased, sold or exchanged to track the composition of the
World ex USA SRI ex Fossil Fuels Index. NTI does not determine the composition
of the World ex USA SRI ex Fossil Fuels Index.
54
As
of September 30, 2023, Northern Trust Corporation, through its affiliates, had
approximately $1.3 trillion in assets under investment management. NTI is
paid by the Adviser (not the Fund).
The
Portfolio Managers of the International Index Fund are Steven Santiccioli, Vice
President and Senior Portfolio Manager, and Brent Reeder, Senior Vice President
and Senior Portfolio Manager, of NTI. Mr. Santiccioli and Mr. Reeder
have been managers of the Fund since its inception. They are jointly and
primarily responsible for the day-to-day investment management of the Fund.
Mr. Santiccioli has been employed as a portfolio manager with NTI since
2003. Mr. Reeder been employed as a portfolio manager with NTI since 1993.
The Statement of Additional Information contains additional information about
Mr. Santiccioli and Mr. Reeder, their compensation, other accounts
they manage, and their ownership of shares of the International Index
Fund.
Discussions
regarding the basis of the Board of Trustees’ approval of the continuance of the
International Index Fund’s Investment Advisory Agreement with Green Century
Capital Management and Investment Subadvisory Agreement with NTI are available
in the International Index Fund’s Semi-Annual Report to shareholders for the
fiscal period ended January 31, 2023.
Disclosures Pertaining to the MSCI World ex USA SRI ex
Fossil Fuels Index. The International
Index Fund (the “Fund”) is not sponsored, endorsed, or promoted by MSCI, its
affiliates, information providers or any other third party involved in, or
related to, compiling, computing or creating the MSCI indices (the “MSCI
Parties”), and the MSCI Parties bear no liability with respect to the Fund or
any index on which the Fund is based. The MSCI Parties are not sponsors of the
Fund and are not affiliated with the Fund in any way. The Statement of
Additional Information contains a more detailed description of the limited
relationship the MSCI Parties have with Green Century Capital Management and the
Fund.
Fees. For the services
Green Century Capital Management and NTI provide to the International Index
Fund, Green Century Capital Management receives a total of 0.28% of the average
daily net assets of the Fund. For the services Green Century Capital Management
and NTI provided to the International Index Fund during the fiscal year ended
July 31, 2023, they received a total of 0.28% of the average daily net assets of
the Fund. From those fees, Green Century Capital Management pays NTI a
subadvisory fee.
THE GREEN CENTURY FUNDS
Administrator. Green Century
Capital Management serves as the Administrator of the Green Century Funds. Green
Century Capital Management pays all the expenses of each Fund except each Fund’s
investment advisory fees; any Distribution Plan fees; interest, taxes, brokerage
costs and other capital expenses; expenses of the non-interested Trustees of the
Funds (including counsel fees); and any extraordinary expenses.
55
Each
Fund pays Green Century Capital Management an administrative fee such that,
immediately following any payment to Green Century Capital Management, the total
annual operating expenses of each class of the Fund do not exceed the following
amounts:
|
| |
| |
Fund |
|
% of average daily net assets |
Balanced Fund |
|
|
— Individual Investor Class: |
|
1.48% up to $250 million, times the percentage of the net assets of the
Fund attributable to the Fund’s Individual Investor share class and 1.43%
in excess of $250 million, times the percentage of the net assets of
the Fund attributable to the Fund’s Individual Investor share class |
— Institutional Class: |
|
1.18% up to $250 million, times
the percentage of the net assets of the Fund attributable to the Fund’s
Institutional share class and 1.13% in excess of $250 million, times
the percentage of the net assets of the Fund attributable to the Fund’s
Institutional share class |
Equity Fund |
|
|
— Individual Investor Class: |
|
1.25% |
— Institutional Class: |
|
0.95% |
International Index Fund |
|
|
— Individual Investor Class: |
|
1.28% |
— Institutional Class: |
|
0.98% |
For
the most recent fiscal year, the Administrator received annual fees of 0.83% of
the Balanced Fund’s Individual Investor Class average daily net assets,
0.53% of the Balanced Fund’s Institutional Class average
daily
net assets, 1.02% of the Equity Fund’s Individual Investor Class average
daily net assets, 0.72% of the Equity Fund’s Institutional Class average
daily net assets, 1.00% of the International Index Fund’s Individual Investor
Class average daily net assets and 0.70% of the International Fund’s
Institutional Class average daily net assets.
The
Administrative Services Agreement between the Green Century Funds and Green
Century Capital Management provides that it should remain in force until
terminated. The Agreement may be terminated as to any Fund at any time, without
the payment of any penalty, by the Board of Trustees of the Green Century Funds
or by Green Century Capital Management, in each case on not less than 30 days’
written notice to the other party.
Subadministrator. UMB Fund Services,
Inc. (UMBFS) serves as the subadministrator of the Funds. UMBFS is responsible
for conducting certain administrative services for the Funds subject to the
direction of Green Century Capital Management. UMBFS receives a fee from the
Administrator (not the Funds).
Distributor. UMB Distribution
Services, LLC, an affiliate of UMBFS, serves as the Distributor of the shares of
the Funds.
56
Transfer Agent. Atlantic
Shareholder Services, LLC (Atlantic) is the transfer agent and shareholder
services provider for the Green Century Funds.
Custodian. UMB Bank, n.a. (UMB
Bank) is the custodian for the Green Century Funds.
Independent Registered Public Accounting
Firm. KPMG LLP is the
Independent Registered Public Accounting Firm of the Green Century Funds.
57
YOUR ACCOUNT
CONTACT US
|
| |
| |
For information on opening an account,
purchases, redemptions, balances, and other account services 8:00 am –
6:00 pm Eastern Time, Monday through Friday |
|
1-800-221-5519 |
| |
For daily share price information 24 hours
per day |
|
www.greencentury.com |
| |
For information about the Green Century
Funds 9:00 am – 6:00 pm Eastern Time, Monday through Friday |
|
1-800-93-GREEN (1‑800‑934‑7336) or
[email protected] |
| |
For account registration forms, additional
materials, and to sign up for E-Delivery of shareholder statements and
reports |
|
1-800-93-GREEN (1‑800‑934‑7336) or
[email protected] or www.greencentury.com |
HOW TO INVEST
You
may invest in the Green Century Funds directly or through an intermediary, such
as a financial advisor or a brokerage account.
Directly. Read the
following information and complete the forms sent you with this prospectus
and available online at
www.greencentury.com. You may also open an account online at
www.greencentury.com/open-an-account/. If you
need additional account registration forms, call 1‑800‑934‑7336, email
[email protected] or visit
www.greencentury.com. (Click on “Forms + Documents” on the website’s home
page.)
Through a financial
intermediary. Consult your financial advisor,
broker, mutual fund supermarket or other intermediary for details on how to
invest in a Green Century Fund. The financial intermediary may have different
policies from those described below. An intermediary may also charge a fee for
its services.
When
you invest directly, shares of the Funds are purchased at net asset value with
no front-end sales charge and no contingent deferred sales charge when redeemed.
However, if you invest in shares of a Fund through an investment professional or
financial intermediary, that investment professional or financial intermediary
may charge you a commission in an amount determined and separately disclosed to
you by that investment professional or financial intermediary.
Because
the Funds are not party to any commission arrangement between you and your
investment professional or financial intermediary, any purchases and redemptions
of Fund shares will be made by a Fund at the applicable net asset value (before
imposition of the sales commission). Any commissions charged by an investment
professional or financial intermediary are not reflected in the fees and
expenses listed in each Fund’s fee table or expense example in this prospectus
nor are they reflected in each Fund’s performance in the bar chart and table in
this prospectus because these commissions are not charged by the Funds.
58
TYPES OF ACCOUNTS
|
| |
Regular Investment
Account |
|
Individuals,
businesses, trusts, and non-profit institutions may open regular
investment accounts. |
| |
Traditional
IRA & Roth IRA |
|
Please
read the Green Century Funds IRA Disclosure Statement before opening an
IRA. You may contribute up to $7,000 for 2024 into a Green Century Funds
Traditional IRA or Roth IRA. (If you are 50 years of age or older, the
limit is $8,000 for 2024.) Individuals not covered by a retirement plan at
work and people covered by a retirement plan who meet certain Internal
Revenue Service (“IRS”) income guidelines may be able to deduct their
contributions to a Traditional IRA from their taxable income each year.
When you retire, distributions from your Traditional IRA are generally
taxed as ordinary income. Roth IRAs differ from Traditional IRAs. With a
Roth IRA you cannot deduct your current-year contributions from your
taxable income; however, upon retirement, distributions from your Roth IRA
are generally not taxed as ordinary income. More information is included
in the Green Century Funds IRA Disclosure Statement. |
| |
SEP-IRA |
|
A
Simplified Employee Pension (SEP) plan allows self-employed people and
small business owners to establish SEP-IRAs for the business owner and
eligible employees. SEP-IRAs have specific eligibility rules and
contribution limits (as described on IRS Form 5305-SEP); otherwise
SEP-IRAs follow the same rules as Traditional IRAs. If you are interested
in opening a Green Century Funds SEP-IRA Account, in addition to reading
the IRA Disclosure Statement and filling out an IRA Account Registration
Form, you will also need to complete IRS Form 5305-SEP. You may obtain the
5305-SEP form at the IRS website, www.irs.gov, by calling 1-800-93-GREEN,
by emailing [email protected] or online at www.greencentury.com/forms-documents. |
| |
IRA Transfer/
Rollover |
|
If
you have an existing IRA that you would like to transfer to the Green
Century Funds, or if you have a 401(k) account with a past employer that
you would like to rollover into a Green Century Funds IRA, please review
the Green Century Funds IRA Disclosure Statement, complete the IRA Account
Registration form AND complete the Green Century Funds IRA Transfer
Request Form. More information is included in the Green Century Funds IRA
Disclosure Statement. |
| |
UGMA/
UTMA |
|
Uniform
Gifts to Minors (UGMA) and Uniform Transfers to Minors (UTMA) accounts may
provide you with tax advantages as you put aside savings for your children
or other minors. To open an UGMA or UTMA account, simply use the regular
Green Century Funds Account Registration form and fill in the appropriate
information under the “Gift To Minor”
section. |
59
|
| |
Coverdell Education
Savings Account |
|
Coverdell
Education Savings Accounts are designed to be tax-advantaged vehicles to
save for childrens’ educational expenses. You may open an Education
Savings Account by completing the Education Savings Account Registration
Form. You may also transfer an existing Education Savings Account to a
Green Century Funds Education Savings Account by completing both the
Registration Form and the Education Savings Account Transfer Request Form.
Please read the Green Century Funds Education Savings Account Disclosure
Statement for additional information before opening an Education Savings
Account. |
| |
Other Account
Types |
|
If
this list does not contain the type of account in which you are
interested, please call 1‑800‑934‑7336 and let us know what you are
seeking; we may be able to accommodate you. |
| |
| |
It
is the Green Century Funds’ policy not to accept accounts that are an
investment option of a government entity’s participant-directed plan or
program, as defined in Rule 206(4)-5 of the Investment Advisors Act of
1940. |
CHOOSING A SHARE CLASS
Each
of the Funds offer two share classes, the Individual Investor share class and
the Institutional share class. Each share class is invested in the same
portfolio of securities but each class has its own expense structure and
minimums. It is more expensive to invest in the Individual Investor share class
than in the Institutional share class. The minimum initial investments, as
listed below, are higher for the Institutional share class than for the
Individual Investor share class. Individuals as well as institutions who invest
$250,000 or more may invest in the Institutional share class. Institutions as
well as individuals may invest in the Individual Investor share class.
ACCOUNT MINIMUMS
To Open an Account
Individual Investor Class
|
|
|
| |
Regular
Investment Account* |
|
|
$2,500 |
|
Individual
Retirement Account—Traditional IRA, Roth IRA, SEP-IRA and SIMPLE
IRA |
|
|
$1,000 |
|
Coverdell
Education Savings Account (formerly Education IRA) |
|
|
$1,000 |
|
Uniform
Gifts or Transfers to Minors Account (UGMA/UTMA) |
|
|
$1,000 |
|
|
* A minimum initial investment of only $1,000
is required for investors who wish to open a regular investment account
with a $100 or more per month Automatic Investment Plan. |
|
Institutional Class
|
|
|
| |
All
types of Accounts |
|
|
$250,000 |
|
The
Funds reserve the right to waive the above minimums.
60
To Add to an Account
Individual Investor Class and Institutional Class
|
|
|
| |
By
Check, Wire or Exchange |
|
|
$100 |
|
By
Automatic Investment Plan or Online |
|
|
$50 |
|
HOW TO PURCHASE SHARES
Opening an Account
To
help fight the funding of terrorism and money laundering activities, federal law
requires all financial institutions to obtain, verify, and record information
that identifies each person who opens an account. When you open an account, you
must provide the name, street address, date of birth, and Social Security or Tax
Identification Number for each person on the account registration form. The
Funds will use this information to identify you and may also ask for other
identifying information. For a U.S. citizen living abroad, additional
information will be required. Please call 1-800-221-5519 weekdays from 8:00
a.m. to 6:00 p.m.
|
| |
Mail |
|
To
open an account by check, please complete and sign the registration form.
See also Purchases by Check on page 68. Mail the form with a check made
payable to the Green Century Balanced Fund, the Green Century Equity Fund
or the Green Century International Index Fund (or to the Green Century
Funds). Please note that there may be a delay in receipt of purchase
requests sent by regular mail to a post office address. |
| |
Green
Century Funds |
| |
P.O.
Box 588 |
| |
Portland,
ME 04112 |
| |
| |
Should
you wish to send the registration form and check via an overnight delivery
service, use the following address: |
| |
Green
Century Funds |
| |
c/o
Apex Fund Services |
| |
Three
Canal Plaza, Ground Floor |
| |
Portland,
ME 04101 |
| |
Online |
|
To
open an account online, please go to www.greencentury.com/open-an-account/.
Once you complete the online registration process, money to fund your new
Green Century account will be transferred from the bank account you
provided. The following account types can be opened online: Regular
Investment Accounts (individual or joint), Traditional IRAs (except
rollovers or transfers), Roth IRAs (except rollovers or transfers) and
UGMA/UTMA accounts. |
61
|
| |
| |
Before
proceeding, please have the following ready:
• Your
Social Security Number
• Your
bank account and bank routing number (located on a check from your
checking account or a deposit slip from your savings account)
• The
names, dates of birth and Social Security Numbers of any account
beneficiaries (for IRAs only)
Purchases
made via Automated Clearing House (ACH) are limited to no more than
$25,000 per day. |
| |
Wire |
|
You
may also open an account by instructing your bank to wire Federal funds
(monies of member banks within the Federal Reserve System) to the Green
Century Funds’ bank. Your bank may impose a fee for sending a wire. The
Funds will not be responsible for the consequences of delays, including
delays in the banking or Federal Reserve wire systems. |
| |
| |
Please
call 1-800-221-5519 weekdays from 8:00 a.m. to 6:00 p.m. Eastern Time to
obtain an account number and for more information about how to purchase
shares by wire including bank wiring instructions. After calling, complete
the registration form and mail it to the address given above. |
| |
Exchange |
|
Individual Investor Class |
| |
| |
You
may also open an account in one of the Funds by exchanging shares with a
value of $2,500 or more ($1,000 for an IRA, Education Savings Account or
UGMA/UTMA account) from another Green Century Fund. Your new account
will be established using the same name(s) and address as your existing
account. |
| |
| |
Institutional Class |
| |
| |
You
may also open an account in one of the Funds by exchanging shares with a
value of $250,000 or more from another Green Century Fund. Further, you
may open an account in a Fund’s Institutional Class by exchanging shares
with a value of $250,000 or more from that Fund’s Individual Investor
Class. Your new account will be established using the same name(s) and
address as your existing account. |
62
|
| |
| |
| |
Individual Investor Class and Institutional
Class |
| |
| |
To
exchange by telephone, call 1-800-221-5519 weekdays from 8:00 a.m. to 6:00
p.m. Eastern Time. To exchange by letter, write to the Green Century Funds
at the address given above, including the name of the Fund from which you
are exchanging, the registered name(s) of ownership and address, the
account number, the dollar amount or number of shares to be exchanged and
the Fund into which you are exchanging. Sign your name(s) exactly as it
appears on your account statement. The exchange requirements for
corporations, other organizations, trusts, fiduciaries, institutional
investors and retirement plans may be different from those for individual
accounts. Please call 1-800-221-5519 for more information. Please note
that there may be a delay in receipt of purchase requests sent by regular
mail to a post office address. The Funds reserve the right to modify or
terminate the exchange privilege upon 60 days’ prior written notice to
shareholders. |
| |
| |
If
you exchange your shares within 60 days of purchase or acquisition through
exchange, you will be charged a redemption fee equal to 2.00% of the net
asset value of the shares exchanged. However, the redemption fee will not
apply to exchanges of shares acquired through the reinvestment of
dividends or distributions. To calculate the redemption fees, a Fund will
use the first-in, first-out (FIFO) method to determine which shares are
being exchanged. Under this method, the date of exchange will be compared
with the earliest date shares were acquired for the account. The Funds
reserve the right to modify the terms of, or to terminate, the fee at any
time. |
|
| |
| |
Certain
shareholders of a Fund may be eligible to exchange their shares for shares
of another share class of the same Fund. Generally, shareholders will not
recognize a gain or loss for Federal Income tax purposes upon such an
exchange. Shareholders invested via a financial intermediary should
contact the financial intermediary for more information. |
| |
Automatic
Investment Plan |
|
Individual Investor Class
You
may open a Regular Investment Account with a minimum initial investment of
$1,000 per Fund if you enroll in the Automatic Investment Plan and invest
a minimum of $100 a month through the Plan. You may also add the Automatic
Investment Plan to any account type. Complete and sign the registration
form, including the Automatic Investment Plan section and mail it to:
Green Century Funds, P.O. Box 588, Portland, ME 04112. You may also open
an Automatic Investment Plan account online (Regular Investment Accounts,
Traditional IRAs and Roth IRAs only) at www.greencentury.com/open-an-account/.
You may terminate your participation in the Automatic Investment Plan at
any time with written notification to the Funds at the same address. See
also “Minimum Balances” on page 66. |
63
|
| |
| |
Institutional Class
You
may establish an Automatic Investment Plan when you open an account.
Complete and sign the registration form, including the Automatic
Investment Plan section and mail it to: Green Century Funds, P.O. Box 588,
Portland, ME 04112. You may also open an Automatic Investment Plan account
online (Regular Investment Accounts, Traditional IRAs and Roth IRAs only)
at www.greencentury.com/open-an-account/.
You may terminate your participation in the Automatic Investment Plan at
any time with written notification to the Funds at the same
address. |
Making Additional
Investments
|
| |
Mail |
|
You
may make subsequent investments by submitting a check for $100 or more
with the remittance form sent to you with your account statement. You may
also mail your check with a letter of instruction indicating the amount of
your purchase, your account number, and the name in which your account is
registered, to the following address. Please note that there may be a
delay in receipt of purchase requests sent by regular mail to a post
office address. See also Purchases by Check on page 68. |
| |
Green
Century Funds
P.O.
Box 588
Portland,
ME 04112 |
|
| |
| |
For
overnight delivery services, send to: |
| |
Green
Century Funds
c/o
Apex Fund Services
Three
Canal Plaza, Ground Floor
Portland,
ME 04101 |
| |
Online |
|
You
may purchase additional shares online if you have signed up for this
service. See Online Services on page 67.
Purchases
made via Automated Clearing House (ACH) are limited to no more than
$25,000 per day. |
| |
Telephone |
|
You
may also make subsequent investments by telephoning 1-800-221-5519 if your
bank account is registered with the Funds. |
| |
Wire |
|
You
may also make additional investments by instructing your bank to wire
Federal funds. Your bank may impose a fee for sending the wire. The Green
Century Funds cannot be responsible for the consequences of delays,
including delays in the banking or Federal Reserve wire systems. Call
1-800-221-5519 weekdays from 8:00 a.m. to 6:00 p.m. Eastern Time for bank
wiring instructions. |
| |
Exchange |
|
Follow
instructions under Opening an Account,
above. |
64
|
| |
Automatic
Investment Plan |
|
You
may arrange to make regular investments through automatic deductions from
your checking or savings account. If you wish to select this option,
please complete the appropriate section on your registration form. If you
wish to set up an Automatic Investment Plan after opening an account,
please call 1-800-93-GREEN, e-mail [email protected] or go to www.greencentury.com/forms-documents for
an Automatic Investment Plan form. You may terminate your participation in
the Automatic Investment Plan at any time with written notification to the
Funds at P.O. Box 588, Portland, ME 04112. |
HOW TO SELL SHARES
(REDEMPTIONS)
You
can take money out of your account at any time by selling (redeeming) some or
all of your shares. See also Processing Time on page 69.
|
| |
| |
Telephone |
|
You
may redeem shares by telephone (unless you chose not to allow this option
on your registration form). Call 1-800-221-5519 to request a redemption.
You must provide your name, address, Fund account number and Social
Security number before you may redeem shares by telephone. All telephone
redemption requests are recorded. |
| |
| |
If
you chose not to allow telephone redemption on your registration form and
now wish to redeem by telephone, call 1-800-221-5519 for more information
or download the Telephone Redemption Option form at www.greencentury.com/forms-documents. |
|
| |
Mail |
|
In
order to redeem your shares by mail from an account that is not an IRA
account, complete the Redemption Request Form. To redeem your shares by
mail from an IRA account, complete the IRA Distribution Election and
Authorization Form. Both forms are available by calling 1‑800‑221‑5519 or
by downloading the form at www.greencentury.com/forms-documents. If
you wish, you may instead send a letter to the Green Century Funds and
include the Fund name, the account registration name(s) and address, the
account number, and the dollar amount or the number of shares you wish to
redeem, signed exactly as your name appears on your account statement. You
may be required to obtain a Signature Guarantee on the form or the letter
(see below). Please note that there may be a delay in receipt of
redemption requests sent by regular mail to a post office address. Mail
your form or letter to: |
| |
Green
Century Funds
P.O.
Box 588
Portland,
ME 04112 |
| |
Online |
|
You
may redeem shares online in any non-retirement account if you have signed
up for this service. Online redemption is not available for shares held in
IRA accounts. See Online Services on page
67. |
65
Important Information
About Redemptions
|
| |
Minimum
Balances |
|
Individual Investor Class
|
|
Shareholders
are encouraged to maintain a share balance of at least $2,500. Individual
Retirement Accounts, Education Savings Accounts and Uniform Gifts or
Transfers to Minors Act accounts have a $1,000 minimum balance
requirement. The Funds reserve the right, following 60 days’ written
notice to shareholders, to redeem all shares in accounts with balances
less than the minimum. The Funds will mail the proceeds of the redeemed
account to the shareholder. This provision does not apply to Automatic
Investment Plan accounts. If the value of your account falls below the
minimum as a result of market activity, an involuntary redemption will not
be triggered. |
| |
| |
Institutional Class
|
| |
Shareholders
are encouraged to maintain a share balance of at least $250,000 for all
account types. The Funds reserve the right, following 60 days’ written
notice to shareholders, to redeem all shares in accounts with balances
less than the minimum or to convert those Institutional Class shares to
Individual Investor Class shares. The Funds will mail the proceeds of the
redeemed account to the shareholder. If the value of your account falls
below the minimum as a result of market activity, an involuntary
redemption will not be triggered. |
| |
Redemption
Fee |
|
If
you redeem your shares within 60 days of purchase or acquisition through
exchange, you will be charged a redemption fee equal to 2.00% of the net
asset value of the shares redeemed. However, the redemption fee will not
apply to redemptions of shares acquired through the reinvestment of
dividends or distributions. The redemption fee will also not apply to
redemptions of shares of one share class to purchase shares of another
share class in the same Fund. The fee is charged for the benefit of
remaining shareholders and will be paid to the Fund to help offset
transaction costs the Fund may incur due to excess short-term trading in
the Fund. To calculate the redemption fees, a Fund will use the first-in,
first-out (FIFO) method to determine which shares are being redeemed.
Under this method, the date of redemption or exchange will be compared
with the earliest date shares were acquired for the account. The Funds
reserve the right to modify the terms of, or to terminate, the fee at any
time. |
| |
| |
In
some cases, the Funds may be offered through certain financial
intermediaries whose redemption fee policies may differ from those of the
Funds. If you purchase Fund shares through a financial intermediary,
please contact the intermediary regarding its policies on redemption fees
and market timing. |
66
|
|
|
| |
|
| |
Receiving your
money |
|
By check via U.S. mail |
|
No charge |
|
Online (if you have signed up for this
service) to the authorized bank account of record for your account |
|
No charge |
|
By check via overnight delivery |
|
$30 |
| |
Wired to the authorized bank account of
record for your account |
|
$10 |
|
| |
Signature Guarantees |
|
A
signature guarantee—which is different from a notarized signature—is a
warranty that the signature presented is genuine. You can obtain a
signature guarantee from most banks, brokerage firms and savings
institutions where you have an account. Be sure to ask for a “New
Technology” Medallion Signature Guarantee Stamp. A notary public
cannot provide a signature guarantee. A signature guarantee may be
required for the signature of each person in whose name the account is
registered. |
| |
| |
You
must obtain a signature guarantee in any of the following
situations:
• You
request in writing a redemption of $10,000 or more
• You
request a redemption check payable to someone other than the account
owner(s)
• You
request that a redemption check be sent to an address other than the
address of record on the account
• You
request a redemption and you have changed your address of record within
the last 30 days
• You
request a wire or electronic funds transfer to a bank account other than
the bank account of record on the account
• Any
change to account ownership or registration
• Adding
or changing the bank account of record for the account |
| |
• Authorizing
telephone redemption, if not already authorized on the account
• Authorizing
online transactions, if not already authorized on the account |
| |
| |
Green
Century reserves the right to require a signature guarantee in other
situations as well. |
| |
Other Account Types |
|
The
redemption requirements for corporations, other organizations, trusts,
fiduciaries, institutional investors and Individual Retirement Accounts
(IRAs) may be different from those for regular accounts. For more
information, please call 1-800-221-5519. |
ONLINE SERVICES
You
may access your account, conduct transactions, and view statements online by
signing up for Online Services. After opening an account, visit www.greencentury.com and click on “Access My
Account.” On the login screen, click where indicated to establish Online Account
Access and follow the instructions given on the website. You will need your
account number and Social Security or Tax Identification Number to register to
add Online Access to your account.
67
You
also have the option of selecting electronic delivery of your account
statements, shareholder reports, and other documents. If you would like to
receive documents electronically, log on to your account at https://greencentury.com/access-my-account/
and click “Log into My Account.” If you opt for electronic document delivery,
you will automatically receive an e-mail letting you know when documents are
available online.
If
you have questions about online services or need technical assistance, call
1-800-221-5519 Monday through Friday, 8:00 am to 6:00 pm Eastern Time.
TRANSACTION INFORMATION
Purchases by Check. Checks must be made
payable to the Green Century Balanced Fund, the Green Century Equity Fund or the
Green Century International Index Fund (or to the Green Century Funds). No third
party corporate checks will be honored. For individual, joint, sole
proprietorship, IRA and UGMA/UTMA accounts, checks may be made payable to one or
more owners of the account and endorsed to the Fund(s). Checks also must be
drawn on or payable through a U.S. bank and be in U.S. dollars. No cash
deposits, travelers checks, credit card checks, money orders or counter checks
will be accepted. If you purchase shares with a check that is returned due to
insufficient funds, your purchase will be canceled and you will be responsible
for any losses or fees incurred in the transaction.
Customer Identification Verification
Procedures. Federal law
requires all financial institutions, including the Green Century Funds, to
obtain, verify and record information that identifies each person who opens an
account. In order to open a new account, the Funds will ask you for your name,
street address, date of birth, and Social Security or Tax Identification Number.
If the Funds or their Transfer Agent do not have a reasonable belief as to the
identity of a customer, the account may be rejected or the shareholder may be
blocked from conducting further transactions on the account in accordance with
applicable law until such information is received in good order. The Funds
also reserve the right to close an account within 20 business days of the date
the account was opened at the net asset value of the Fund on the day the account
is closed if clarifying information or documentation as to the identity of the
shareholder is not received. The Funds further reserve the right to close an
account if, in the opinion of the Funds or their Transfer Agent, the account is
suspected of being opened for fraud or money laundering purposes. The Funds or
their Transfer Agent will correspond with the prospective shareholders advising
them of the reasons their account has been rejected and what, if any,
information as required by the USA PATRIOT Act is necessary to allow the account
to be accepted.
Account Information Changes. To change the
address on an account, you may call the Green Century shareholder services
office at 1-800-221-5519 or send Green Century the information in writing as
described below. To change any other information regarding an account (including
a change of beneficiary or change in the automatic investment plan), you must
send Green Century this information in writing. Please mail the new information
to: Green Century Funds, P.O. Box 588, Portland, ME 04112. Include your Green
Century account number, your name, address, signature and phone number, along
with the new information. If you prefer, you may fax this information to: Green
Century Funds, 207-347-2195. You may confirm receipt of this information by
calling the Green Century shareholders services office at 1-800-221-5519.
68
Please
note that the following account information changes require a signature
guarantee:
|
• |
|
Any
change to account ownership or registration |
|
• |
|
Adding
or changing the bank account of record for the
account |
|
• |
|
Authorizing
telephone redemption, if not already authorized on the
account |
|
• |
|
Authorizing
online transactions, if not already authorized on the
account |
Green
Century reserves the right to require a signature guarantee in other situations.
For more information about signature guarantees, see Signature Guarantees on
page 67.
Joint
Accounts. The Funds’ policy
on the rights of joint account owners provides that any account owner has the
authority to act on the account without notice to the other account owner(s).
There is an exception to this policy for some corporate accounts for which two
signatures are explicitly required per written instructions on file for the
account. In addition, the Funds, at their sole discretion and for their
protection and that of other shareholders, may require the written consent of
all account owners prior to acting upon the instructions of any account owner.
Large
Redemptions. If during any
90-day period, you redeem Fund shares worth more than $250,000 (or 1% of the
Fund’s assets if that percentage is less than $250,000), the Fund reserves the
right to pay all or part of the redemption proceeds in-kind, that is, in
securities rather than in cash. If payment is made in-kind, you may incur
brokerage commissions if you elect to sell the securities for cash.
Confirmation of Transactions. All purchases and
redemptions will be confirmed promptly. Usually a confirmation of your purchase
or sale of Fund shares will be mailed by the second business day following
receipt of your instructions. Automatic reinvestments of distributions and
systematic investments and withdrawals may be confirmed only by quarterly
statements.
Share
Price Calculation. Once each day that
the New York Stock Exchange is open for trading, the share price for each share
class of each Fund is calculated. This is the share class’ Net Asset Value (the
NAV). Because the Green Century Funds are no-load, this is also the offering
price at which each share is sold. Shares are purchased and/or sold at the next
share price calculated after your order is received in good form.
All
purchase and redemption requests received in good order by the Funds’ transfer
agent or an authorized agent are executed, without a sales charge, at the
next-determined net asset value. The authorized agent is responsible for
transmitting your request to the Funds in a timely manner. Reinvested dividends
receive the net asset value as of the ex-dividend date. Note however that if you
redeem shares within 60 days of purchase, a 2.00% redemption fee will be
charged. For additional information, see How to Sell Shares (Redemptions) on
page 65.
Processing Time. When you redeem,
the Funds will normally send your redemption proceeds on the next day the New
York Stock Exchange is open for trading following the receipt of your redemption
request in
69
good
order by the Funds’ transfer agent or an authorized agent. The authorized agent
is responsible for transmitting your request to the Funds in a timely manner.
Payment of redemption proceeds may take up to seven days, or longer in the
following cases:
Shares Recently Purchased by Check. If you purchase
shares by check and redeem them by any method within 10 days of purchase, the
Funds will release your redemption proceeds when your check clears. It is
possible, although unlikely, that this could take up to 10 days. If you purchase
shares by Federal funds wire, you may avoid this delay.
Shares Recently Purchased by Cashier’s
Check. If you purchase
shares by a cashier’s check, the Funds will hold your redemption proceeds for
fifteen business days following the purchase.
Shares Purchased by Wire. If you open an account by wire, the Funds’
transfer agent will not be able to process a redemption request until it has
received your completed and signed registration form.
Other
Information Regarding Payment of Redemption Proceeds. Your redemption
proceeds may be delayed, or your right to receive redemption proceeds suspended,
if the NYSE is closed (other than on weekends or holidays) or trading is
restricted, if the Securities and Exchange Commission determines that an
emergency or other circumstances exist that make it impracticable for a Fund to
sell or value its portfolio securities, or otherwise as permitted by the rules
of or by the order of the Securities and Exchange Commission.
Under
normal circumstances, each Fund expects to meet redemption requests by using
cash or cash equivalents in its portfolio and/or selling portfolio assets to
generate cash. Under stressed or abnormal market conditions or circumstances,
including circumstances adversely affecting the liquidity of a Fund’s
investments, a Fund may be more likely to be forced to sell portfolio assets to
meet redemptions than under normal market circumstances. Under such
circumstances, a Fund could be forced to liquidate assets at inopportune times
or at a loss or depressed value. Each Fund also may pay redemption proceeds
using cash obtained through borrowing arrangements that may be available from
time to time.
Each
Fund reserves the right to pay part or all of the redemption proceeds in kind,
i.e., in securities, rather than cash. If a Fund redeems in kind, it generally
will deliver to you a proportionate share of the portfolio securities owned by
the Fund. Securities you receive this way may increase or decrease in value
while you hold them and you may incur brokerage and transaction charges and tax
liability when you convert the securities to cash. A Fund may redeem in kind at
a shareholder’s request or if, for example, the Fund reasonably believes that a
cash redemption may have a substantial impact on the Fund and its remaining
shareholders.
During
periods of deteriorating or stressed market conditions, when an increased
portion of a Fund’s portfolio may be comprised of less-liquid investments, or
during extraordinary or emergency circumstances, a Fund may be more likely to
pay redemption proceeds with cash obtained through short-term borrowing
arrangements (if available) or by giving you securities.
70
Sales
of shares made less than 60 days after settlement of a purchase or acquisition
through exchange will be subject to an early redemption fee, with certain
exceptions. (See “Important Information About Redemptions—Redemption Fee” and
“Policy on Market Timing” for more information.)
Tax
Information. A redemption of
shares, including an exchange into another Fund, is a sale of shares and may
result in a gain or loss for income tax purposes. An exchange of shares of one
class of a Fund directly for shares of another class of shares of that Fund
normally should not be taxable for federal income tax purposes. Please see below
for additional information on dividends and taxes.
Social Security or Tax Identification
Number. Please complete the
Social Security or Tax Identification Number section of the Funds’ registration
form when you open an account. Federal tax law requires the Funds to apply
backup withholding to dividends, capital gains distributions and redemption and
exchange proceeds from accounts (other than those of certain exempt payees)
without a Social Security or Tax Identification Number and certain other
information or upon notification from the IRS or a broker that withholding is
required. The backup withholding rate is currently 24%. The Funds reserve the
right to reject new account registrations without a Social Security or Tax
Identification Number. The Funds also reserve the right to close, by redemption,
accounts without Social Security or Tax Identification Numbers.
Telephone Transaction Liability. All shareholders
may initiate transactions (except redemptions) by telephone. To redeem shares by telephone, you must elect this
option in writing. See page 65 for further information. Neither the Funds
nor any of their service contractors will be liable for any loss or expense in
acting upon any telephone instructions that are reasonably believed to be
genuine. In attempting to confirm that telephone instructions are genuine, the
Funds will use procedures that are considered to be reasonable, including
requesting a shareholder to provide information about the account. To the extent
that the Funds fail to use reasonable procedures to verify the genuineness of
telephone instructions, the Funds and/or their service contractors may be liable
for any losses due to telephone instructions that prove to be fraudulent or
unauthorized.
Policy on Market Timing. Frequent purchases,
exchanges and redemptions of Fund shares (often referred to as market timing or
short-term trading) may hurt Fund performance by disrupting the management of
the Fund’s portfolio and by increasing expenses. Because the International
Index Fund invests significantly in non-U.S. securities, it may be particularly
vulnerable to the risks of short-term trading. The Funds seek to discourage
market timing and protect long-term shareholders through several methods.
Pursuant to policies and procedures adopted by the Funds’ Board of Trustees,
these methods include:
|
• |
|
imposing
a 2.00% redemption fee on the redemption or exchange of shares held less
than sixty days (for more information on the redemption fee, see page
66); |
|
• |
|
using
“fair value” pricing when appropriate so that an investor cannot purchase,
redeem or exchange Fund shares at a price that does not reflect the fair
value of a Fund’s portfolio; |
|
• |
|
monitoring
shareholder account activity in order to detect patterns of frequent
purchases, exchanges and sales, including those that appear to be made in
response to short-term fluctuations in share price or in order to
improperly avoid the imposition of the redemption fee;
and |
|
• |
|
reserving
the right to restrict or reject, limit, delay, or impose other conditions
on, any exchange or purchase or to close a shareholder account based on a
suspected history of market timing or if any particular transaction may
adversely affect the interests of a Fund or its
shareholders. |
71
The
Funds and Green Century Capital Management seek to apply the above fees and
restrictions uniformly and will not waive them for any account. Neither the
Funds nor Green Century Capital Management will enter into any arrangements to
permit market timing in the shares of the Funds.
The
Funds may not know the identity of shareholders in omnibus accounts and must
rely on the assistance of the financial intermediary in whose name the account
is held (a broker-dealer or retirement plan, for example). The Funds and/or
their distributor or administrator, as appropriate and in accordance with
applicable law, have entered into agreements with financial intermediaries
requiring the intermediaries to collect the redemption fee and to provide
certain information to help identify market timing activity and to prohibit
further purchases or exchanges by a shareholder identified as having engaged in
market timing. Because the Funds may not be able to detect all instances of
market timing, particularly in omnibus accounts and where an investor may
attempt to conceal its identity, the Funds cannot guarantee that they will be
able to deter all instances of market timing or entirely eliminate short-term
trading in shares of the Funds.
Reservations. Each Fund may stop
offering its shares for sale at any time and may reject any order for the
purchase or exchange of shares. Each Fund may also modify the conditions of
purchase at any time. The Funds reserve the right to waive the minimum
investment requirements; accounts opened with less than the minimum required
amount may be subject to the minimum balances provisions. (See page 66). The
Funds reserve the right to revise or terminate the telephone redemption
privilege at any time, without notice. If the Funds suspend telephone redemption
privileges, or if you have trouble getting through on the phone, you will still
be able to redeem your shares by mail.
SHAREHOLDER ACCOUNT
STATEMENTS
Shareholders
will receive quarterly statements showing all account activity during that
quarter, including dividends. Additional purchases and redemptions will be
confirmed promptly, usually by the second business day after the purchase or
redemption request is received. Automatic reinvestments of distributions and
systematic investments and withdrawals may be confirmed only by quarterly
statements. The Green Century Funds will send you detailed tax information on
the amount and type of their dividends and distributions each year.
HOUSEHOLDING OF THE
FUNDS’ MAILINGS TO ACCOUNTS HELD THROUGH FINANCIAL INTERMEDIARIES
For
accounts held through financial intermediaries: To reduce expenses, the Funds
may mail only one copy of the Funds’ Prospectus, each Annual and Semi-Annual
Report and other regulatory documents to addresses at which two or more accounts
are registered. If you wish to receive individual copies of these documents,
please telephone 1-800-221-5519 or contact your financial institution. The Funds
will begin sending you individual copies thirty days after receiving your
request.
DIVIDENDS AND TAXES
The
Funds normally declare and pay income dividends, if any, semi-annually in June
and December and distribute net capital gains, if any, once a year in December.
Each Fund intends to distribute substantially all of its income and net capital
gains.
72
You
may opt to receive distributions in cash (via check) or have them reinvested in
additional shares of the Funds. Dividends and capital gain distributions are
automatically reinvested unless you request otherwise. If you invest in an
Individual Retirement Account (IRA), all dividends and capital gains
distributions must be reinvested; however, if you are over 591⁄2
years old, distributions from IRA accounts may be paid to you in cash (via
check).
The following discussion is very general. You may
wish to consult a tax adviser regarding the effect that an investment in a Fund
may have on your own tax situation.
Taxability of Distributions. As long as a Fund
qualifies for treatment as a regulated investment company (which each intends to
do), it pays no federal income tax on the earnings it distributes to
shareholders.
Unless
you hold your shares in a tax-advantaged account (including a retirement account
such as an IRA) you will normally have to pay federal income taxes, and any
state or local taxes, on distributions you receive from a Fund, whether you take
the distributions in cash or have them reinvested in additional shares.
Non-corporate shareholders may be taxed at rates of up to 20% on distributions
reported by a Fund as “qualified dividend income”. “Qualified dividend income”
generally is income derived from U.S. corporations or certain foreign
corporations that are either incorporated in a U.S. possession or eligible for
benefits under certain U.S. income tax treaties. In addition, dividends that a
Fund receives in respect of stock of certain foreign corporations may be
“qualified dividend income” if that stock is readily tradable on an established
U.S. securities market. Distributions reported as capital gain dividends are
taxable as long-term capital gains without regard to the length of time you have
held your shares. Long-term capital gains are generally taxed to non-corporate
shareholders at rates of up to 20%. Other distributions are generally taxable as
ordinary income. Distributions derived from interest on U.S. Government
securities (but not distributions of gain from the sale of such securities) may
be exempt from state and local taxes. Some dividends paid in January may be
taxable as if they had been paid the previous December. A portion of dividends
received from a Fund (but none of a Fund’s capital gain dividends) may qualify
for the dividends-received deduction for corporate shareholders. Since the
International Index Fund’s income is derived primarily from non-U.S.
investments, it is not expected that a substantial portion of dividends paid by
the International Index Fund will qualify for the dividends-received deduction
for corporations.
A
3.8% Medicare contribution tax generally applies to all or a portion of the net
investment income of a shareholder who is an individual and not a nonresident
alien for federal income tax purposes and who has adjusted gross income (subject
to certain adjustments) that exceeds a threshold amount. This 3.8% tax also
applies to all or a portion of the undistributed net investment income of
certain shareholders that are estates and trusts. For these purposes, dividends,
interest and certain capital gains are generally taken into account in computing
a shareholder’s net investment income.
If
the International Index Fund meets certain requirements with respect to its
holdings, it may elect to “pass through” to shareholders foreign taxes that it
pays, in which case each shareholder will include the amount of such taxes in
computing gross income, but will be eligible to claim a credit or deduction for
such taxes, subject to generally applicable limitations on such deductions and
credits. The International Index Fund’s investment in certain foreign securities
or foreign currencies may accelerate the International Index Fund’s
distributions to shareholders and increase the distributions taxed to
shareholders as ordinary income.
73
After
the end of each year, the Green Century Funds will send you detailed tax
information on the amount and type of distributions and dividends you received
during that year.
Distributions
by a Fund will reduce that Fund’s net asset value per share. Therefore, if you
buy shares shortly before the record date of a distribution, you may pay the
full price for the shares and then effectively receive a portion of the purchase
price back as a taxable distribution.
If
you are neither a citizen nor a resident of the United States, each Fund will
withhold U.S. federal income tax at the rate of 30% on taxable dividends and
other payments that are subject to such withholding. You may be able to arrange
for a lower withholding rate under an applicable tax treaty if you supply the
appropriate documentation required by each Fund. This 30% withholding tax will
not apply to dividends that a Fund reports as (a) interest-related dividends, to
the extent such dividends are derived from the Fund’s “qualified net interest
income,” or (b) short-term capital gain dividends, to the extent such dividends
are derived from the Fund’s “qualified short-term capital gains.” “Qualified net
interest income” is a Fund’s net income derived from U.S.-source interest and
original issue discount, subject to certain exceptions and limitations.
“Qualified short-term gain” generally means the excess of the net short-term
capital gain of a Fund for the taxable year over its net long-term capital loss,
if any.
Each
Fund is also required in certain circumstances to apply backup withholding on
dividends, redemption proceeds and certain other payments that are paid to any
shareholder (including a shareholder who is neither a citizen nor a resident of
the United States) who does not furnish to the Fund certain information and
certifications or who is otherwise subject to backup withholding. The backup
withholding rate is currently 24%. Backup withholding will not, however, be
applied to payments that have been subject to the 30% withholding tax described
in the preceding paragraph. Prospective investors in a Fund should read the
Fund’s account registration form for additional information regarding backup
withholding of federal income tax.
Unless
certain non-U.S. entities that hold a Fund’s shares comply with IRS
requirements that will generally require them to report information regarding
U.S. persons investing in, or holding accounts with, such entities, a 30%
withholding tax may apply to the Fund’s distributions payable to such entities.
A non-U.S. shareholder may be exempt from the withholding described in this
paragraph under an applicable intergovernmental agreement between the U.S. and a
foreign government, provided that the shareholder and the applicable foreign
government comply with the terms of such agreement.
Taxability of Transactions. When you redeem,
sell or exchange shares, it is generally considered a taxable event for you.
Depending on the purchase price and the sale price of the shares you redeem,
sell or exchange, you may have a gain or loss on the transaction. You are
responsible for any tax liabilities generated by your transactions.
VALUATION OF SHARES
Green
Century Balanced Fund and Green Century Equity Fund. The net asset value
per share of each class of each Fund is computed by dividing the value of the
Fund’s total assets less its liabilities attributable to each class by the total
number of shares outstanding of each class.
74
Equity
securities and other instruments held by a Fund for which market quotations are
readily available are generally valued at the last sale price on the exchange or
market on which the security or instrument is primarily traded at the time of
valuation. Securities listed on the NASDAQ Stock Market, Inc. (“NASDAQ”) are
generally valued at the NASDAQ Official Closing Price. Debt securities held by a
Fund are generally valued on the basis of valuations furnished by an independent
pricing service. When a market price is not available, or when Green Century,
the Fund’s valuation designee, has reason to believe that the price does not
reflect market realities, securities may be valued instead by using fair value
methods. In such a case, a Fund’s value for a security may be different from
quoted market values. Because the Green Century Balanced Fund invests primarily
in the stocks and bonds of U.S. companies that are traded on U.S. exchanges and
the Equity Fund invests primarily in the stocks of U.S. companies that are
traded on U.S. exchanges, it is expected that there would be limited
circumstances in which a Fund would use fair value pricing. Fair value pricing
may be used if, for example, the exchange on which a portfolio security is
principally traded closes early, trading in a particular security is halted
during the day and does not resume prior to the time a Fund calculates its NAV,
a portfolio security is thinly traded or a security’s issuer is in default or
bankruptcy proceedings, in accordance with the valuation designee’s fair value
procedures. Green Century has been designated as the Funds’ valuation designee,
with responsibility for fair valuation subject to oversight by the Fund’s Board
of Trustees.
Green
Century International Index Fund. The net asset value
per share of each class of the Green Century International Index Fund is
computed by dividing the value of the Fund’s total assets less its liabilities
attributable to each class by the total number of shares outstanding of each
class.
Equity
securities and other instruments held by the Fund for which market quotations
are readily available are generally valued at the last sale price on the
exchange or market on which the security or instrument is primarily traded at
the time of valuation. Securities listed on NASDAQ are generally valued at the
NASDAQ Official Closing Price. Debt securities held by a Fund are generally
valued on the basis of valuations furnished by an independent pricing service.
The Fund uses a fair value model developed by an independent pricing service to
assist in valuing non-U.S. securities. On a daily basis, the pricing service
recommends changes, based on a proprietary model, to the closing market prices
of each non-U.S. security held by the Fund to reflect the security’s fair value
at the time the Fund determines its net asset value. The Fund’s valuation
designee applies these recommendations in accordance with the valuation
designee’s fair value procedures. Green Century has been designated as the
Fund’s valuation designee, with responsibility for fair valuation subject to
oversight by the Fund’s Board of Trustees.
The
valuations of securities traded in non-U.S. markets will often be determined as
of the earlier closing time of the markets on which they primarily trade. When
the Fund holds securities or other assets that are denominated in a foreign
currency, the Fund will normally use the currency exchange rate as of 4:00 p.m.
Eastern Time. Non-U.S. markets are open for trading on weekends and other days
when the Fund does not price its shares. Therefore, the value of the Fund’s
shares may change on days when you will not be able to purchase or redeem Fund
shares.
When
a market price is not available, or when the valuation designee has reason to
believe that the price does not reflect market realities, securities may be
valued instead by using fair value methods. In such a case, the Fund’s value for
a security may be different from quoted market values. Fair value pricing may
be
75
used
if, for example, the exchange on which a portfolio security is principally
traded closes early, trading in a particular security is halted during the day
and does not resume prior to the time the Fund calculates the NAV for each share
class, a portfolio security is thinly traded or a security’s issuer is in
default or bankruptcy proceedings.
Green
Century Funds. The net asset value
per share of each share class of each Fund is determined every business day as
of the scheduled close of regular trading of the New York Stock Exchange
(usually 4:00 p.m. Eastern Time). If the New York Stock Exchange closes at
another time, the Fund will calculate the NAV of each share class as of the
scheduled closing time. For share prices 24 hours a day, visit www.greencentury.com/fund-performance.
SHARES AND VOTING RIGHTS
As
with other mutual funds, investors purchase shares when they invest money in a
Fund. Each share and fractional share of a class of the Fund entitles the
shareholder to:
|
• |
|
Receive
a proportional interest in the assets of the Fund allocable to that
class |
|
• |
|
Cast
one vote for each dollar of net asset value (number of shares owned times
net asset value per share) represented by a shareholder’s shares in a
class of a Fund on certain Fund matters. Shares of a Fund vote together as
a single class on certain matters, including the election of the Funds’
trustees and changes in fundamental policies. Share classes have exclusive
voting rights with respect to matters affecting only that
class. |
The
Funds are not required to hold annual meetings and, to avoid unnecessary costs,
do not intend to do so except when certain matters, such as a change in its
fundamental policies, must be decided. If a meeting is held and you cannot
attend, you may vote by proxy. Before the meeting, the Funds will send you proxy
materials that explain the issues to be decided and include instructions on
voting.
76
FINANCIAL HIGHLIGHTS
The
Financial Highlights table is intended to help you understand the Funds’
financial performance for the period of the Funds’ operations. Certain
information reflects financial results for a single share of each Fund. The
total returns in the table represent the rate that an investor would have earned
(or lost) on an investment (assuming reinvestment of all dividends and
distributions). The information has been derived from the Funds’ financial
statements which have been audited by KPMG LLP, whose reports, along with the
Funds’ financial statements, are included in the Funds’ Annual Report which is
available upon request.
GREEN CENTURY BALANCED
FUND INDIVIDUAL INVESTOR CLASS
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
For the Years Ended
July 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Net
Asset Value, beginning of year. |
|
$ |
32.93 |
|
|
$ |
37.21 |
|
|
$ |
30.83 |
|
|
$ |
29.05 |
|
|
$ |
27.05 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income (loss) |
|
|
0.11 |
|
|
|
(0.01 |
) |
|
|
0.02 |
|
|
|
0.11 |
|
|
|
0.12 |
|
Net
realized and unrealized gain (loss) on investments |
|
|
1.05 |
|
|
|
(2.78 |
) |
|
|
7.51 |
|
|
|
2.25 |
|
|
|
2.50 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
increase (decrease) from investment operations |
|
|
1.16 |
|
|
|
(2.79 |
) |
|
|
7.53 |
|
|
|
2.36 |
|
|
|
2.62 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less
dividends: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Dividends
from net investment income |
|
|
(0.09 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
(0.11 |
) |
|
|
(0.11 |
) |
Distributions
from net realized gains |
|
|
(0.54 |
) |
|
|
(1.49 |
) |
|
|
(1.13 |
) |
|
|
(0.47 |
) |
|
|
(0.51 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
decrease from dividends |
|
|
(0.63 |
) |
|
|
(1.49 |
) |
|
|
(1.15 |
) |
|
|
(0.58 |
) |
|
|
(0.62 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, end of year |
|
$ |
33.46 |
|
|
$ |
32.93 |
|
|
$ |
37.21 |
|
|
$ |
30.83 |
|
|
$ |
29.05 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
return |
|
|
3.67 |
% |
|
|
(7.97 |
)% |
|
|
24.86 |
% |
|
|
8.19 |
% |
|
|
10.04 |
% |
Ratios/Supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of year (in 000’s) |
|
$ |
279,640 |
|
|
$ |
296,605 |
|
|
$ |
323,991 |
|
|
$ |
309,871 |
|
|
$ |
276,487 |
|
Ratio
of expenses to average net assets |
|
|
1.46 |
% |
|
|
1.46 |
% |
|
|
1.46 |
% |
|
|
1.47 |
% |
|
|
1.48 |
% |
Ratio
of net investment income to average net assets |
|
|
0.35 |
% |
|
|
(0.03 |
)% |
|
|
0.07 |
% |
|
|
0.37 |
% |
|
|
0.44 |
% |
Portfolio
turnover(a) |
|
|
21 |
% |
|
|
9 |
% |
|
|
17 |
% |
|
|
25 |
% |
|
|
19 |
% |
(a) |
Calculated
at Fund level. |
GREEN CENTURY BALANCED
FUND INSTITUTIONAL CLASS
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
For the Years
Ended July 31 |
|
|
For the Period November 30, 2020 (Commencement of Operations)
to July 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
Net
Asset Value, beginning of period |
|
$ |
33.06 |
|
|
$ |
37.27 |
|
|
$ |
33.58 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from investment operations: |
|
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.20 |
|
|
|
0.08 |
|
|
|
0.08 |
|
Net
realized and unrealized gain (loss) on investments |
|
|
1.07 |
|
|
|
(2.78 |
) |
|
|
4.78 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Total
increase (decrease) from investment operations |
|
|
1.27 |
|
|
|
(2.70 |
) |
|
|
4.86 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Less
dividends: |
|
|
|
| |
|
|
| |
|
| |
Dividends
from net investment income |
|
|
(0.23 |
) |
|
|
(0.02 |
) |
|
|
(0.04 |
) |
Distributions
from net realized gains |
|
|
(0.54 |
) |
|
|
(1.49 |
) |
|
|
(1.13 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
Total
decrease from dividends. |
|
|
(0.77 |
) |
|
|
(1.51 |
) |
|
|
(1.17 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, end of period |
|
$ |
33.56 |
|
|
$ |
33.06 |
|
|
$ |
37.27 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Total
return |
|
|
4.01 |
% |
|
|
(7.72 |
)% |
|
|
14.89 |
%(a) |
Ratios/Supplemental
data: |
|
|
|
| |
|
|
| |
|
| |
Net
assets, end of period (in 000’s) |
|
$ |
114,950 |
|
|
$ |
101,317 |
|
|
$ |
86,347 |
|
Ratio
of expenses to average net assets |
|
|
1.16 |
% |
|
|
1.16 |
% |
|
|
1.16 |
%(b) |
Ratio
of net investment income to average net assets |
|
|
0.65 |
% |
|
|
0.27 |
% |
|
|
0.33 |
%(b) |
Portfolio
turnover(c) |
|
|
21 |
% |
|
|
9 |
% |
|
|
17 |
%(a) |
(c) |
Calculated
at Fund level. |
77
GREEN CENTURY EQUITY FUND
INDIVIDUAL INVESTOR CLASS
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
For the Years Ended
July 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Net
Asset Value, beginning of year. |
|
$ |
64.46 |
|
|
$ |
71.35 |
|
|
$ |
52.23 |
|
|
$ |
46.17 |
|
|
$ |
43.16 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.23 |
|
|
|
0.09 |
|
|
|
0.09 |
|
|
|
0.25 |
|
|
|
0.25 |
|
Net
realized and unrealized gain (loss) on investments |
|
|
7.68 |
|
|
|
(6.11 |
) |
|
|
19.60 |
|
|
|
6.16 |
|
|
|
3.61 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
increase (decrease) from investment operations |
|
|
7.91 |
|
|
|
(6.02 |
) |
|
|
19.69 |
|
|
|
6.41 |
|
|
|
3.86 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less
dividends: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Dividends
from net investment income |
|
|
(0.18 |
) |
|
|
(0.02 |
) |
|
|
(0.06 |
) |
|
|
(0.22 |
) |
|
|
(0.21 |
) |
Distributions
from net realized gains |
|
|
(0.16 |
) |
|
|
(0.85 |
) |
|
|
(0.51 |
) |
|
|
(0.13 |
) |
|
|
(0.64 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
decrease from dividends |
|
|
(0.34 |
) |
|
|
(0.87 |
) |
|
|
(0.57 |
) |
|
|
(0.35 |
) |
|
|
(0.85 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, end of year |
|
$ |
72.03 |
|
|
$ |
64.46 |
|
|
$ |
71.35 |
|
|
$ |
52.23 |
|
|
$ |
46.17 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
return |
|
|
12.37 |
% |
|
|
(8.64 |
)% |
|
|
37.90 |
% |
|
|
13.95 |
% |
|
|
9.33 |
% |
Ratios/Supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of year (in 000’s) |
|
$ |
314,349 |
|
|
$ |
301,668 |
|
|
$ |
338,094 |
|
|
$ |
265,946 |
|
|
$ |
244,706 |
|
Ratio
of expenses to average net assets |
|
|
1.25 |
% |
|
|
1.25 |
% |
|
|
1.25 |
% |
|
|
1.25 |
% |
|
|
1.25 |
% |
Ratio
of net investment income to average net assets |
|
|
0.35 |
% |
|
|
0.11 |
% |
|
|
0.14 |
% |
|
|
0.52 |
% |
|
|
0.58 |
% |
Portfolio
turnover(a) |
|
|
4 |
% |
|
|
5 |
% |
|
|
9 |
% |
|
|
10 |
% |
|
|
14 |
% |
(a) |
Calculated
at Fund level. |
GREEN CENTURY EQUITY FUND
INSTITUTIONAL CLASS
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
For the Years Ended
July 31, |
|
|
For the Period April 30,
2018 (Commencement of Operations) to July 31, 2019 |
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
|
|
Net
Asset Value, beginning of period |
|
$ |
64.13 |
|
|
$ |
71.12 |
|
|
$ |
52.10 |
|
|
$ |
46.11 |
|
|
$ |
43.16 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.42 |
|
|
|
0.31 |
|
|
|
0.30 |
|
|
|
0.39 |
|
|
|
0.39 |
|
Net
realized and unrealized gain (loss) on investments |
|
|
7.65 |
|
|
|
(6.13 |
) |
|
|
19.54 |
|
|
|
6.16 |
|
|
|
3.59 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
increase (decrease) from investment operations |
|
|
8.07 |
|
|
|
(5.82 |
) |
|
|
19.84 |
|
|
|
6.55 |
|
|
|
3.98 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less dividends: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Dividends
from net investment income |
|
|
(0.45 |
) |
|
|
(0.32 |
) |
|
|
(0.31 |
) |
|
|
(0.43 |
) |
|
|
(0.39 |
) |
Distributions
from net realized gains |
|
|
(0.16 |
) |
|
|
(0.85 |
) |
|
|
(0.51 |
) |
|
|
(0.13 |
) |
|
|
(0.64 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
decrease from dividends |
|
|
(0.61 |
) |
|
|
(1.17 |
) |
|
|
(0.82 |
) |
|
|
(0.56 |
) |
|
|
(1.03 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, end of period |
|
$ |
71.59 |
|
|
$ |
64.13 |
|
|
$ |
71.12 |
|
|
$ |
52.10 |
|
|
$ |
46.11 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
return |
|
|
12.72 |
% |
|
|
(8.38 |
)% |
|
|
38.33 |
% |
|
|
14.28 |
% |
|
|
9.65 |
% |
Ratios/Supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of period (in 000’s) |
|
$ |
243,539 |
|
|
$ |
213,705 |
|
|
$ |
178,038 |
|
|
$ |
94,039 |
|
|
$ |
54,850 |
|
Ratio
of expenses to average net assets |
|
|
0.95 |
% |
|
|
0.95 |
% |
|
|
0.95 |
% |
|
|
0.95 |
% |
|
|
0.95 |
% |
Ratio
of net investment income to average net assets |
|
|
0.65 |
% |
|
|
0.41 |
% |
|
|
0.44 |
% |
|
|
0.82 |
% |
|
|
0.88 |
% |
Portfolio
turnover(a) |
|
|
4 |
% |
|
|
5 |
% |
|
|
9 |
% |
|
|
10 |
% |
|
|
14 |
% |
(a) |
Calculated
at Fund level. |
78
GREEN CENTURY MSCI
INTERNATIONAL INDEX FUND INDIVIDUAL INVESTOR CLASS
FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
For the Years Ended
July 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Net
Asset Value, beginning of period |
|
$ |
11.82 |
|
|
$ |
14.94 |
|
|
$ |
11.68 |
|
|
$ |
11.07 |
|
|
$ |
11.50 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.16 |
|
|
|
0.19 |
|
|
|
0.09 |
|
|
|
0.10 |
|
|
|
0.18 |
|
Net
realized and unrealized gain (loss) on investments |
|
|
1.23 |
|
|
|
(2.87 |
) |
|
|
3.27 |
|
|
|
0.59 |
|
|
|
(0.40 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
increase (decrease) from investment operations |
|
|
1.39 |
|
|
|
(2.68 |
) |
|
|
3.36 |
|
|
|
0.69 |
|
|
|
(0.22 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less
dividends: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Dividends
from net investment income |
|
|
(0.14 |
) |
|
|
(0.18 |
) |
|
|
(0.10 |
) |
|
|
(0.08 |
) |
|
|
(0.16 |
) |
Distributions
from net realized gains |
|
|
— |
|
|
|
(0.26 |
) |
|
|
— |
|
|
|
— |
|
|
|
(0.05 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
decrease from dividends |
|
|
(0.14 |
) |
|
|
(0.44 |
) |
|
|
(0.10 |
) |
|
|
(0.08 |
) |
|
|
(0.21 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, end of period |
|
$ |
13.07 |
|
|
$ |
11.82 |
|
|
$ |
14.94 |
|
|
$ |
11.68 |
|
|
$ |
11.07 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
return |
|
|
11.83 |
% |
|
|
(18.36 |
)% |
|
|
28.76 |
% |
|
|
6.28 |
% |
|
|
(1.82 |
)% |
Ratios/Supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of period (in 000’s) |
|
$ |
52,275 |
|
|
$ |
47,435 |
|
|
$ |
46,508 |
|
|
$ |
29,073 |
|
|
$ |
22,110 |
|
Ratio
of expenses to average net assets |
|
|
1.28 |
% |
|
|
1.28 |
% |
|
|
1.28 |
% |
|
|
1.28 |
% |
|
|
1.28 |
% |
Ratio
of net investment income to average net assets |
|
|
1.34 |
% |
|
|
1.55 |
% |
|
|
0.77 |
% |
|
|
0.98 |
% |
|
|
1.79 |
% |
Portfolio
turnover(a) |
|
|
42 |
% |
|
|
29 |
% |
|
|
31 |
% |
|
|
20 |
% |
|
|
23 |
% |
(a) |
Calculated
at Fund level. |
GREEN CENTURY MSCI
INTERNATIONAL INDEX FUND INSTITUTIONAL CLASS FINANCIAL HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
For the Years Ended
July 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
|
2020 |
|
|
2019 |
|
Net
Asset Value, beginning of period |
|
$ |
11.78 |
|
|
$ |
14.90 |
|
|
$ |
11.66 |
|
|
$ |
11.07 |
|
|
$ |
11.50 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from investment operations: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
investment income |
|
|
0.19 |
|
|
|
0.24 |
|
|
|
0.13 |
|
|
|
0.13 |
|
|
|
0.21 |
|
Net
realized and unrealized gain (loss) on investments |
|
|
1.23 |
|
|
|
(2.86 |
) |
|
|
3.26 |
|
|
|
0.59 |
|
|
|
(0.38 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
increase (decrease) from investment operations |
|
|
1.42 |
|
|
|
(2.62 |
) |
|
|
3.39 |
|
|
|
0.72 |
|
|
|
(0.17 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less
dividends: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Dividends
from net investment income |
|
|
(0.19 |
) |
|
|
(0.24 |
) |
|
|
(0.15 |
) |
|
|
(0.13 |
) |
|
|
(0.21 |
) |
Distributions
from net realized gains |
|
|
— |
|
|
|
(0.26 |
) |
|
|
— |
|
|
|
— |
|
|
|
(0.05 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
decrease from dividends |
|
|
(0.19 |
) |
|
|
(0.50 |
) |
|
|
(0.15 |
) |
|
|
(0.13 |
) |
|
|
(0.26 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, end of period |
|
$ |
13.01 |
|
|
$ |
11.78 |
|
|
$ |
14.90 |
|
|
$ |
11.66 |
|
|
$ |
11.07 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
return |
|
|
12.15 |
% |
|
|
(18.05 |
)% |
|
|
29.09 |
% |
|
|
6.51 |
% |
|
|
(1.43 |
)% |
Ratios/Supplemental
data: |
|
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
| |
Net
assets, end of period (in 000’s) |
|
$ |
135,514 |
|
|
$ |
115,620 |
|
|
$ |
112,002 |
|
|
$ |
61,608 |
|
|
$ |
42,012 |
|
Ratio
of expenses to average net assets |
|
|
0.98 |
% |
|
|
0.98 |
% |
|
|
0.98 |
% |
|
|
0.98 |
% |
|
|
0.98 |
% |
Ratio
of net investment income to average net assets |
|
|
1.64 |
% |
|
|
1.85 |
% |
|
|
1.07 |
% |
|
|
1.28 |
% |
|
|
2.09 |
% |
Portfolio
turnover(a) |
|
|
42 |
% |
|
|
29 |
% |
|
|
31 |
% |
|
|
20 |
% |
|
|
23 |
% |
(a) |
Calculated
at Fund level. |
79
PRIVACY POLICY
The
Green Century Funds respect the privacy of our shareholders and customers. Our
policy is to safeguard the personal information you have entrusted to us.
We
collect nonpublic personal and financial information from you for the purpose of
opening and maintaining a Green Century Funds shareholder account. The
information we collect may include your name, address, Social Security Number,
birth date, telephone number, email address, and/or bank account number. This
information may come from your request for Green Century literature, your
account registration forms, transactions in your account and other
correspondence.
We
do not sell any information about our current or former customers to third
parties. Green Century may share your personal and financial information with
third parties only:
|
• |
|
When
authorized by you. |
|
• |
|
As
required or otherwise permitted by law. |
|
• |
|
To
process transactions and service your account. |
The
third parties with whom we may share your personal and financial information, as
described above, may include:
|
• |
|
Affiliated
and non-affiliated service providers (for example, the Funds’ Transfer
Agent and printing and mailing providers who process transactions and
service your account); |
|
• |
|
Government
agencies, other regulatory bodies and law enforcement officials (for
example, for tax purposes or for reporting suspicious transactions);
and, |
|
• |
|
Other
organizations, as permitted by law (for example, for fraud
prevention). |
Our
contracts with service providers require them to maintain the confidentiality of
your information.
Green
Century restricts access to nonpublic personal and financial information about
you to those employees who need to know that information in order to provide
products or services to you. We require our employees to guard the
confidentiality of your information and we maintain policies and procedures to
safeguard your nonpublic personal and financial information.
Privacy Online. Just as we protect
your personal and financial information collected on account registration forms
and other correspondence, we also employ security measures to protect your
information while you view your account or conduct transactions online. Our
online account access website provides a secure platform to prevent unauthorized
access to your information. Your Internet browser provides additional security
by allowing us to use Secure Socket Layer (SSL) encryption up to 128-bit length
encryption (the most secure system currently available) when transmitting your
information. In an effort to provide the highest degree of security for your
information, we strongly recommend the use of 128-bit encryption browsers.
Versions of Mozilla 2.0 and higher, and Microsoft Internet Explorer 6.0 and
higher provide this level of security.
Encryption
is the process for scrambling your identification and account information as it
passes between our system and your computer. The encryption process is built
into most Internet browsers. The larger the number of bits for encryption (e.g.
40 or 128) the more difficult (exponentially) it is for an unauthorized person
to unscramble the transmission. The highest level of encryption commercially
available is 128-bit and is what we recommend to access your information.
Notice. Green Century will
provide you notice of our Privacy Policy annually, as long as you maintain an
account with us. Green Century reserves the right to make changes to this
policy. We will notify you in writing before we make changes that affect the way
we collect and share your information. If you have chosen to receive Green
Century documents electronically, we will provide notification to you via email.
We will notify you through periodic updates of our Privacy Policy online when we
make changes that affect the security measures we employ to protect your
information while viewing your account information or conducting transactions
online.
Should
you have questions, please telephone us at 1-800-934-7336.
This Privacy Policy applies to the Green Century
Funds and Green Century Capital Management, Inc. (7/09)
The Green Century Funds Privacy Policy is not a part
of the Prospectus.
80
INVESTMENT ADVISER AND
ADMINISTRATOR
Green
Century Capital Management, Inc.
114
State Street
Boston,
MA 02109
1-800-934-7336
www.greencentury.com
INVESTMENT SUBADVISER
(Balanced Fund)
Trillium
Asset Management LLC
Two
Financial Center
60
South Street, Suite 1100
Boston,
MA 02111
INVESTMENT SUBADVISER
(Equity Fund and International Index Fund)
Northern
Trust Investments, Inc.
50
South LaSalle Street
Chicago,
IL 60603
LICENSOR OF THE KLD400 EX
FOSSIL FUELS INDEX (Equity Fund) AND THE WORLD EX USA SRI EX FOSSIL FUELS INDEX
(International Index Fund)
MSCI
Inc.
7
World Trade Center
250
Greenwich Street, 49th
Floor
New
York, NY 10007
COUNSEL TO INDEPENDENT
TRUSTEES OF THE FUNDS
Ropes
& Gray LLP
Prudential
Tower
800
Boylston Street
Boston,
MA 02199
SUBADMINISTRATOR AND
DISTRIBUTOR
UMB
Fund Services, Inc. (Subadministrator)
UMB
Distribution Services, LLC (Distributor)
235
West Galena Street
Milwaukee,
WI 53212
CUSTODIAN
UMB
Bank, n.a.
928
Grand Blvd
Kansas
City, MO 64106
TRANSFER AGENT
Atlantic
Shareholder Services, LLC
Three
Canal Plaza
Portland,
ME 04101
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
KPMG
LLP
Two
Financial Center
60
South Street
Boston,
MA 02111
TO INVEST AND FOR ACCOUNT
CORRESPONDENCE:
Green
Century Funds
PO
Box 588
Portland,
ME 04112
1-800-221-5519
A
Statement of Additional Information about the Funds has been filed with the
Securities and Exchange Commission (SEC). The Statement of Additional
Information, the independent registered public accounting firm’s report and
financial statements in the Funds’ most recent
annual
report, and the financial statements in the Funds’ most recent
semi-annual
report, are incorporated by reference in this prospectus. Additional
information about the Green Century Funds’ investments is available in the
Funds’ annual and semi-annual reports. The annual report includes a
discussion of the market conditions and investment strategies that significantly
affected the Funds’ performance during their last fiscal year. To obtain free
copies of any of these documents or to make shareholder inquiries, call
1-800-934-7336. Each of these documents is also available on our website at
www.greencentury.com.
Fund
reports, the Statement of Additional Information and other information about the
Funds are also available on the EDGAR Database on the SEC’s internet site at
http://www.sec.gov. Copies may be
obtained upon payment of a duplicating fee, by electronic request at the
following e-mail address:
[email protected].
811-06351
Printed
on recycled paper with soy-based ink.