UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act File Number 811-06351
Green Century Funds
114 State Street
Suite 200
Boston, MA 02109
(Address of principal executive offices)
Green Century Capital Management, Inc.
114 State Street
Suite 200
Boston, MA 02109
(Name and address of agent for service)
Registrant’s telephone number, including area code: (617) 482-0800
Date of fiscal year end: July 31
Date of reporting period: January 31, 2013
Item 1. Reports to Stockholders
The following is a copy of the report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
|
SEMI-ANNUAL REPORT Green Century Balanced Fund Green Century Equity Fund January 31, 2013 | |
| An investment for your future.® | 114 State Street, Boston, Massachusetts 02109 | |
For information on the Green Century Funds®, call 1-800-93-GREEN. For information on how to open an account and account services, call 1-800-221-5519 8:00 am to 6:00 pm Eastern Time, Monday through Friday. For share price and account information, call 1-800-221-5519, twenty-four hours a day.
Dear Green Century Funds Shareholder:
For more than 20 years, Green Century Capital Management (Green Century) has been deeply engaged in fighting climate change. We have addressed this pressing issue by offering environmentally responsible investment products and leading successful shareholder advocacy campaigns that encourage companies to improve their sustainability.
In the last six months, the growing threat of climate change has received renewed attention. Erratic and devastating weather events — from raging wildfires to Hurricane Sandy — have made economic, public health and personal impacts tangible, causing a shift in American consciousness about climate change.
Climate change is also back on the national policy agenda. In his recent inaugural address, President Obama declared, “We will respond to the threat of climate change, knowing that failure to do so would betray our children and future generations.” At Green Century, we believe that curbing climate change requires action on multiple fronts. As investors in the Green Century Funds, we know that many of you may feel the same way.
The role that investment markets can play in curbing climate change has recently been the focus of 350.org, an organization founded by environmentalist and author Bill McKibben. Drawing lessons from the successful South African divestment movement, 350.org is calling on universities and colleges to divest their endowments from fossil fuel companies. Green Century believes that divestment can play a key role in securing needed policy changes by multiplying the effect of each individual action. Many of Green Century investors agree with McKibben’s statement: “It does not make sense to invest my retirement money in a company whose business plan means that there won’t be an earth to retire on.”
Green Century provides options for investors who want to align their portfolios with their values on climate change, as well as on firearms, gambling, GMOs (genetically modified organisms), nuclear energy, tobacco, factory farming, and more industries that pose significant risks to our environment and communities.
Fossil Fuel Free
The Green Century Balanced Fund seeks capital growth and income from a diversified portfolio of stocks and bonds without investing in companies engaged in the extraction, production, or refining of fossil fuels from coal, oil, or gas companies. At the same time, the Balanced Fund strives to be at the forefront of clean energy by investing in the Renewable Energy and Energy Efficiency sector, among other sectors. This strategy allows investors to gain exposure to the energy sector through clean energy companies.
Environmental, Social and Governance Factors
The Green Century Equity Fund is invested in the MSCI KLD 400 Social Index, which is comprised of approximately 400 companies selected based on a review of environmental, social and governance (ESG) factors and performance. This well-known index is the longest running socially responsible index.
Within the energy sector, the Equity Fund takes a low carbon approach by not investing in coal and major oil companies. The Fund also recently added a new screen on GMOs to its existing restrictions on nuclear energy, firearms and military weapons, tobacco, alcohol, and gambling companies.
Green Century has pioneered the national investor coalition representing over $35 billion in assets, engaging companies on their hydraulic fracturing operations. The coalition has filed 37 shareholder resolutions with 20 companies. As a result, companies have dramatically improved the transparency of their operations, including disclosing the type of chemicals injected into wells. This year, Green Century is working to obtain quantifiable and measurable reductions in the amount of water and toxic chemicals used and also increase gas companies’ responsiveness to community concerns. As natural gas becomes a larger source of our nation’s domestic energy supply, it is imperative that these companies protect the local environment surrounding their operations.
Creating a Cleaner, Greener Future
Green Century believes that investors can help secure needed corporate and policy advancements on climate change and is pleased to provide investment vehicles that advance this goal. Whether you have chosen a 100% fossil fuel free investment, an alternative low carbon approach that includes shareholder advocacy engagements with natural gas companies, or both, you are helping pave the way for a greener tomorrow.
We thank you for your investment in the Green Century Funds and look forward to continuing to partner with you to build a sustainable future.
Respectfully,
Green Century Capital Management
For more regular updates on Green Century and our advocacy efforts, please consider signing up for our e-newsletter. Visit: www.greencentury.com/news/signup, email info@greencentury.com or call 1-800-93-GREEN.
2
THE GREEN CENTURY BALANCED FUND
The Green Century Balanced Fund seeks capital growth and income from a diversified portfolio of stocks and bonds that meet Green Century’s standards for corporate environmental performance. The portfolio managers of the Balanced Fund avoid fossil fuel companies and aim to invest in companies that are in the business of solving environmental problems or that are committed to reducing their environmental impact.
| AVERAGE ANNUAL RETURN* Total expense ratio: 1.48% |
Six Months | One Year | Five Years | Ten Years | ||||||||||||||
| December 31, 2012 | Green Century Balanced Fund | 5.24% | 13.29% | 2.22% | 7.75% | |||||||||||||
| Custom Balanced Index1 | 4.54% | 11.40% | 3.78% | 6.64% | ||||||||||||||
| January 31, 2013 | Green Century Balanced Fund | 9.77% | 12.91% | 3.91% | 8.48% | |||||||||||||
| Custom Balanced Index | 6.55% | 11.22% | 4.98% | 7.14% | ||||||||||||||
* The performance data quoted represents past performance and is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information as of the most recent month-end, call 1-800-93-GREEN. Performance includes the reinvestment of income dividends and capital gain distributions. Performance shown does not reflect the deduction of taxes that a shareholder might pay on Fund distributions or the redemption of Fund shares. A redemption fee of 2.00% may be imposed on redemptions or exchanges of shares you have owned for 60 days or less. Please see the Prospectus for more information.
During the six month and one year periods ended December 31, 2012 and January 31, 2013, the Balanced Fund outperformed the Custom Balanced Index. For all the time periods listed in the table, the Balanced Fund return was both positive and higher than its respective benchmark, except for the five year period. For the six month period ended January 31, 2013, the Balanced Fund returned 9.77%, while the Custom Balanced Index returned 6.55%.
In the view of the Balanced Fund’s portfolio managers, during the twelve months ended January 31, 2013, investors have largely focused on political risk, and both stock market and bond market returns have reflected these concerns. Throughout 2012, U.S. economic conditions were largely positive with steady, albeit low, sustained growth throughout the year. However, market perceptions and market behavior focused on political risks, including the fate of the Euro and the European Union, economic growth in China, and the apparent deadlock in Washington regarding the widely feared “fiscal cliff,” all of which
GREEN CENTURY BALANCED FUND
INVESTMENT BY INDUSTRY
3
contributed to widespread risk aversion in the markets. The Balanced Fund’s portfolio managers perceived a mismatch between the underlying economic conditions and how stocks and bonds were priced. As a result, the managers positioned the Balanced Fund to take advantage of this perceived mis-pricing, with a substantial commitment to equities, and with very short term average bond maturities. This strategy worked in that equity returns for the 12 month period were considerably stronger than bond market returns.
As the Balanced Fund is managed to be free of fossil fuel company holdings, the Fund does not have any holdings in the traditional energy sector. During the twelve months ended January 31, 2013, the spot price of oil swung between a low of $80 per barrel and a high of $110, and fossil fuel energy stock performance was below that of the market. However, the clean energy/clean tech/conservation sector in which the Fund preferentially invests had an even more challenging year, with the average Balanced Fund holding in this sector down nearly 30%. In addition to being challenged with volatile energy prices, the clean energy companies held in the portfolio faced rapidly changing conditions in the semi-conductor and photovoltaic industries due to China’s wholesale entry into the solar power field and China’s attempts to regulate its level of economic demand.
The Fund’s equity holdings which positively contributed to its performance during the twelve months ended January 31, 2013 included: Discovery Communications2, Mastercard2, Costco2, and Hartford Financial Services2. Poor performers included Cummins Inc.2, Men’s Wearhouse2, and Green Mountain Coffee Roasters2.
The Balanced Fund’s portfolio managers believe the Fund is positioned to benefit from the moderate economic growth expected in 2013. The Fund’s equity holdings are slightly weighted toward more cyclical sectors such as materials stocks, and the Fund’s bond holdings are weighted toward short to intermediate maturity and high quality bonds.
The Green Century Balanced Fund invests in the stocks and bonds of environmentally responsible corporations of various sizes, including small, medium, and large companies. The value of the stocks held in the Balanced Fund will fluctuate in response to factors that may affect a single issuer, industry, or sector of the economy or may affect the market as a whole. Bonds are subject to a variety of risks including interest rate, credit, and inflation risk.
THE GREEN CENTURY EQUITY FUND
The Green Century Equity Fund invests essentially all of its assets in the stocks which make up the MSCI KLD 400 Social Index (the KLD 400 Index), comprised of 400 primarily large capitalization U.S. companies selected based on comprehensive social and environmental sustainability criteria. The Equity Fund seeks to provide shareholders with a long-term total return that matches that of the Index.
| AVERAGE ANNUAL RETURN* Total expense ratio: 1.25% |
Six Months | One Year | Five Years | Ten Years | ||||||||||||||
| December 31, 2012 | Green Century Equity Fund | 5.20% | 11.80% | 0.96% | 5.35% | |||||||||||||
| S&P 500® Index3 | 5.95% | 16.00% | 1.66% | 7.10% | ||||||||||||||
| January 31, 2013 | Green Century Equity Fund | 11.07% | 14.05% | 3.45% | 6.30% | |||||||||||||
| S&P 500® Index | 9.91% | 16.78% | 3.97% | 7.93% | ||||||||||||||
* The performance data quoted represents past performance and is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information as of the most recent month-end, call 1-800-93-GREEN. Performance includes the reinvestment of income dividends and capital gain distributions. Performance shown does not reflect the deduction of taxes that a shareholder might pay on Fund distributions or the redemption of Fund shares. A redemption fee of 2.00% may be imposed on redemptions or exchanges of shares you have owned for 60 days or less. Please see the Prospectus for more information.
4
The Green Century Equity Fund, which closely tracks the KLD 400 Index, returned 11.07% for the six month period ended January 31, 2013, while the S&P 500® Index returned 9.91% during the same period.
The outperformance of the Equity Fund relative to the S&P 500® Index was largely due to differences in sector allocation and stock selection criteria between the two indices. The KLD 400 Index has a relative underweight to the Utilities sector, which was one of the worst performing sectors in the index during the period. Additionally, the KLD 400 Index does not include Apple Inc.2, which had the largest weight in the S&P 500® Index and was also among the worst performers during the period.
According to an analysis by the Equity Fund’s portfolio managers, fear over Spain’s debt crisis weighed on the market mid-year, but central bank largesse worldwide helped to resume the upward trend in U.S. equities. However, U.S. equities fell behind international developed countries’ equities during the fourth quarter, narrowing the gap between their returns for the year, as “fiscal cliff” fear and uncertainty over the U.S. elections led to a sharp October sell-off in U.S. markets. During this time, economists nationwide cut U.S. growth expectations for 2013 and fear mounted that the United States might contract into another recession if Congress was unable to reach a bargain to avert the cliff. However, U.S. equities improved in November and December as the domestic economic picture lightened. For instance housing sales, prices and new-build activity showed tangible improvement in a sector of the economy that has long been dormant.
The Equity Fund, like other mutual funds invested primarily in stocks, carries the risk of investing in the stock market. The large companies in which the Equity Fund is invested may perform worse than the stock market as a whole. The Equity Fund 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.
GREEN CENTURY EQUITY FUND
INVESTMENT BY INDUSTRY
5
The Green Century Funds’ proxy voting guidelines and a record of the Funds’ proxy votes for the year ended June 30, 2012 are available without charge, upon request, (i) at www.greencentury.com, (ii) by calling 1-800-93-GREEN, (iii) sending an e-mail to info@greencentury.com, and (iv) on the Securities and Exchange Commission’s website at www.sec.gov.
The Green Century Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of the year on Form N-Q. The Green Century Funds’ Forms N-Q are available on the EDGAR database on the SEC’s website at www.sec.gov. These Forms may also be reviewed and copied at the SEC’s Public Reference Room in Washington D.C. Information about the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The information on Form N-Q may also be obtained by calling 1-800-93-GREEN, or by e-mailing a request to info@greencentury.com.
1 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 US Corporate & Government Index (the BofA Merrill Lynch Index). The S&P Supercomposite 1500 Index is an unmanaged broad-based capitalization-weighted index comprising 1500 stocks of large-cap, mid-cap, and small-cap U.S. companies. The BofA Merrill Lynch Index tracks the performance of U.S. dollar-denominated investment grade government and corporate public debt issued in the U.S. domestic bond market with at least 1 year and less than 10 years remaining maturity, including U.S. treasury, U.S. agency, foreign government, supranational and corporate securities. It is not possible to invest directly in the Custom Balanced Index, the S&P Supercomposite 1500 Index, or the BofA Merrill Lynch Index.
2 As of January 31, 2013, the following companies comprised the listed percentages of each of the Green Century Funds:
| Portfolio Holding | GREEN
CENTURY BALANCED FUND |
GREEN CENTURY EQUITY FUND |
||||||
| Discovery Communications |
1.93 | % | 0.27 | % | ||||
| Mastercard |
1.42 | % | 0.00 | % | ||||
| Costco |
2.06 | % | 0.75 | % | ||||
| Hartford Financial Services |
1.67 | % | 0.17 | % | ||||
| Cummins Inc. |
0.39 | % | 0.35 | % | ||||
| Men’s Wearhouse |
0.00 | % | 0.02 | % | ||||
| Green Mountain Coffee Roasters |
0.00 | % | 0.10 | % | ||||
| Apple Inc. |
2.22 | % | 0.00 | % | ||||
Portfolio composition will change due to ongoing management of the Funds. Please refer to the Green Century Funds website for current information regarding the Funds’ portfolio holdings. These holdings are subject to risk as described in the Funds’ Prospectus. References to specific investments should not be construed as a recommendation of the securities by the Funds, their administrator, or their distributor.
3 The S&P 500® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The S&P 500® Index is heavily weighted toward stocks with large market capitalization and represents approximately two-thirds of the total market value of all domestic stocks. It is not possible to invest directly in the S&P 500® Index.
This material must be preceded or accompanied by a current Prospectus.
Distributor: UMB Distribution Services, LLC, 3/13
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.
6
GREEN CENTURY FUNDS EXPENSE EXAMPLE
For the six months ended January 31, 2013 (unaudited)
As a shareholder of the Green Century Funds (the “Funds”), you incur two types of costs: (1) transaction costs, including redemption fees on certain redemptions; and (2) ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from August 1, 2012 to January 31, 2013 (the “period”).
Actual Expenses The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 equals 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the actual return of either of the Funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees on shares held for 60 days or less. Therefore, the second line of the table is useful in comparing the ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs could have been higher.
| BEGINNING ACCOUNT VALUE AUGUST 1, 2012 |
ENDING ACCOUNT VALUE JANUARY 31, 2013 |
EXPENSES PAID DURING THE PERIOD1 |
||||||||||
| Balanced Fund |
||||||||||||
| Actual Expenses |
$ | 1,000.00 | $ | 1,097.70 | $ | 7.83 | ||||||
| Hypothetical Example, assuming a 5% return before expenses |
1,000.00 | 1,017.54 | 7.53 | |||||||||
| Equity Fund |
||||||||||||
| Actual Expenses |
1,000.00 | 1,110.70 | 6.65 | |||||||||
| Hypothetical Example, assuming a 5% return before expenses |
1,000.00 | 1,018.70 | 6.36 | |||||||||
1 Expenses are equal to the Funds’ annualized expense ratios (1.48% for the Balanced Fund and 1.25% for the Equity Fund), multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
7
| GREEN CENTURY BALANCED FUND PORTFOLIO OF INVESTMENTS January 31, 2013 (unaudited) |
8
| GREEN CENTURY BALANCED FUND PORTFOLIO OF INVESTMENTS January 31, 2013 (unaudited) |
continued |
9
| GREEN CENTURY BALANCED FUND PORTFOLIO OF INVESTMENTS January 31, 2013 (unaudited) |
concluded |
See Notes to Financial Statements
10
| GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS January 31, 2013 (unaudited) |
11
| GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS January 31, 2013 (unaudited) |
continued |
12
| GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS January 31, 2013 (unaudited) |
continued |
13
| GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS January 31, 2013 (unaudited) |
continued |
14
| GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS January 31, 2013 (unaudited) |
continued |
15
| GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS January 31, 2013 (unaudited) |
concluded |
See Notes to Financial Statements
16
GREEN CENTURY FUNDS STATEMENTS OF ASSETS AND LIABILITIES
January 31, 2013
(unaudited)
| BALANCED FUND | EQUITY FUND | |||||||
| ASSETS: |
||||||||
| Investments, at value (cost $54,678,061 and $44,084,564, respectively) |
$ | 66,672,399 | $ | 56,877,903 | ||||
| Receivables for: | ||||||||
| Capital stock sold |
216,908 | 5,276 | ||||||
| Interest |
129,512 | — | ||||||
| Dividends |
56,678 | 52,297 | ||||||
|
|
|
|
|
|||||
| Total assets |
67,075,497 | 56,935,476 | ||||||
|
|
|
|
|
|||||
| LIABILITIES: |
||||||||
| Payable for capital stock repurchased |
83,883 | 5,748 | ||||||
| Accrued expenses |
83,597 | 61,055 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
167,480 | 66,803 | ||||||
|
|
|
|
|
|||||
| NET ASSETS |
$ | 66,908,017 | $ | 56,868,673 | ||||
|
|
|
|
|
|||||
| NET ASSETS CONSIST OF: |
||||||||
| Paid-in capital |
$ | 59,023,278 | $ | 51,023,726 | ||||
| Undistributed net investment income |
2,675 | 7,599 | ||||||
| Accumulated net realized losses on investments |
(4,112,274 | ) | (6,955,991 | ) | ||||
| Net unrealized appreciation on investments |
11,994,338 | 12,793,339 | ||||||
|
|
|
|
|
|||||
| NET ASSETS |
$ | 66,908,017 | $ | 56,868,673 | ||||
|
|
|
|
|
|||||
| SHARES OUTSTANDING (UNLIMITED NUMBER OF SHARES AUTHORIZED @ $0.01 PAR VALUE) |
3,391,512 | 2,475,074 | ||||||
|
|
|
|
|
|||||
| NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE |
$ | 19.73 | $ | 22.98 | ||||
|
|
|
|
|
|||||
GREEN CENTURY FUNDS STATEMENTS OF OPERATIONS
For the six months ended January 31, 2013 (unaudited)
| BALANCED FUND | EQUITY FUND | |||||||
| INVESTMENT INCOME: |
||||||||
| Interest income |
$ | 239,660 | $ | 9 | ||||
| Dividend and other income (net of $1,231 and $69 foreign withholding taxes, respectively) |
522,955 | 641,260 | ||||||
|
|
|
|
|
|||||
| Total investment income |
762,615 | 641,269 | ||||||
|
|
|
|
|
|||||
| EXPENSES: |
||||||||
| Administrative services fee |
259,135 | 268,682 | ||||||
| Investment advisory fee |
202,934 | 67,169 | ||||||
|
|
|
|
|
|||||
| Total expenses |
462,069 | 335,851 | ||||||
|
|
|
|
|
|||||
| NET INVESTMENT INCOME |
300,546 | 305,418 | ||||||
|
|
|
|
|
|||||
| NET REALIZED AND UNREALIZED GAIN: |
||||||||
| Net realized gain on investments |
432,445 | 627,387 | ||||||
| Change in net unrealized appreciation on investments |
5,076,478 | 4,709,508 | ||||||
|
|
|
|
|
|||||
| NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS |
5,508,923 | 5,336,895 | ||||||
|
|
|
|
|
|||||
| NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
$ | 5,809,469 | $ | 5,642,313 | ||||
|
|
|
|
|
|||||
See Notes to Financial Statements
17
GREEN CENTURY FUNDS STATEMENTS OF CHANGES IN NET ASSETS
| BALANCED FUND | EQUITY FUND | |||||||||||||||
| FOR THE SIX MONTHS ENDED JANUARY 31, 2013 (UNAUDITED) |
FOR THE YEAR ENDED JULY 31, 2012 (AUDITED) |
FOR THE SIX MONTHS ENDED JANUARY 31, 2013 (UNAUDITED) |
FOR THE YEAR ENDED JULY 31, 2012 (AUDITED) |
|||||||||||||
| INCREASE (DECREASE) IN NET ASSETS: |
||||||||||||||||
| From operations: | ||||||||||||||||
| Net investment income |
$ | 300,546 | $ | 333,212 | $ | 305,418 | $ | 497,218 | ||||||||
| Net realized gain (loss) on investments |
432,445 | 698,443 | 627,387 | (185,192 | ) | |||||||||||
| Change in net unrealized appreciation on Investments |
5,076,478 | 1,034,519 | 4,709,508 | 2,358,110 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase in net assets resulting from operations |
5,809,469 | 2,066,174 | 5,642,313 | 2,670,136 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Dividends and distributions to shareholders: | ||||||||||||||||
| From net investment income |
(297,871 | ) | (330,794 | ) | (305,456 | ) | (503,447 | ) | ||||||||
| Capital share transactions: | ||||||||||||||||
| Proceeds from sales of shares |
4,965,803 | 4,099,738 | 3,005,398 | 9,871,395 | ||||||||||||
| Reinvestment of dividends and distributions |
290,571 | 322,341 | 300,646 | 495,535 | ||||||||||||
| Payments for shares redeemed |
(2,658,082 | ) | (5,769,152 | ) | (2,745,881 | ) | (14,924,885 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in net assets resulting from capital share transactions |
2,598,292 | (1,347,073 | ) | 560,163 | (4,557,955 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total increase (decrease) in net assets |
8,109,890 | 388,307 | 5,897,020 | (2,391,266 | ) | |||||||||||
| NET ASSETS: |
||||||||||||||||
| Beginning of period |
58,798,127 | 58,409,820 | 50,971,653 | 53,362,919 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| End of period |
$ | 66,908,017 | $ | 58,798,127 | $ | 56,868,673 | $ | 50,971,653 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Undistributed net investment income |
2,675 | — | 7,599 | 7,637 | ||||||||||||
See Notes to Financial Statements
18
GREEN CENTURY BALANCED FUND FINANCIAL HIGHLIGHTS
| SIX MONTHS ENDED JANUARY 31, 2013 |
FOR THE YEARS ENDED JULY 31, | |||||||||||||||||||||||
| (UNAUDITED) | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||
| Net Asset Value, beginning of period |
$ | 18.06 | $ | 17.50 | $ | 15.76 | $ | 14.75 | $ | 16.52 | $ | 17.78 | ||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income from investment operations: | ||||||||||||||||||||||||
| Net investment income |
0.09 | 0.10 | 0.13 | 0.18 | 0.27 | 0.28 | ||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
1.67 | 0.56 | 1.75 | 1.01 | (1.77 | ) | (1.27 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total increase (decrease) from investment operations |
1.76 | 0.66 | 1.88 | 1.19 | (1.50 | ) | (0.99 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Less dividends: | ||||||||||||||||||||||||
| Dividends from net investment income |
(0.09 | ) | (0.10 | ) | (0.14 | ) | (0.18 | ) | (0.27 | ) | (0.27 | ) | ||||||||||||
|
|
|
|
|
|
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|
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|
|
|
|
|||||||||||||
| Net Asset Value, end of period |
$ | 19.73 | $ | 18.06 | $ | 17.50 | $ | 15.76 | $ | 14.75 | $ | 16.52 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total return |
9.77 | %(a) | 3.81 | % | 11.92 | % | 8.07 | % | (8.88 | )% | (5.62 | )% | ||||||||||||
| Ratios/Supplemental data: | ||||||||||||||||||||||||
| Net assets, end of period (in 000’s) |
$ | 66,908 | $ | 58,798 | $ | 58,410 | $ | 52,761 | $ | 48,105 | $ | 52,703 | ||||||||||||
| Ratio of expenses to average net assets |
1.48 | %(b) | 1.45 | % | 1.38 | % | 1.38 | % | 1.38 | % | 1.38 | % | ||||||||||||
| Ratio of net investment income to average net assets |
0.96 | %(b) | 0.58 | % | 0.72 | % | 1.13 | % | 1.97 | % | 1.50 | % | ||||||||||||
| Portfolio turnover |
12 | %(a) | 58 | % | 70 | % | 48 | % | 33 | % | 44 | % | ||||||||||||
| (a) | Not annualized. |
| (b) | Annualized. |
GREEN CENTURY EQUITY FUND FINANCIAL HIGHLIGHTS
| SIX MONTHS ENDED JANUARY 31, 2013 |
FOR THE YEARS ENDED JULY 31, | |||||||||||||||||||||||
| (UNAUDITED) | 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||
| Net Asset Value, beginning of period |
$ | 20.81 | $ | 19.99 | $ | 17.44 | $ | 15.65 | $ | 18.83 | $ | 22.66 | ||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income from investment operations: | ||||||||||||||||||||||||
| Net investment income |
0.12 | 0.19 | 0.18 | 0.17 | 0.21 | 0.18 | ||||||||||||||||||
| Net realized and unrealized gain (loss) on investments |
2.17 | 0.83 | 2.57 | 1.77 | (3.17 | ) | (2.81 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total increase (decrease) from investment operations |
2.29 | 1.02 | 2.75 | 1.94 | (2.96 | ) | (2.63 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Less dividends: | ||||||||||||||||||||||||
| Dividends from net investment income |
(0.12 | ) | (0.20 | ) | (0.20 | ) | (0.15 | ) | (0.22 | ) | (0.19 | ) | ||||||||||||
| Distributions from net realized gains |
— | — | — | — | — | (c) | (1.01 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total decrease from dividends |
(0.12 | ) | (0.20 | ) | (0.20 | ) | (0.15 | ) | (0.22 | ) | (1.20 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net Asset Value, end of period |
$ | 22.98 | $ | 20.81 | $ | 19.99 | $ | 17.44 | $ | 15.65 | $ | 18.83 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total return |
11.07 | %(a) | 5.14 | % | 15.77 | % | 12.39 | % | (15.58 | )% | (12.28 | )% | ||||||||||||
| Ratios/Supplemental data: | ||||||||||||||||||||||||
| Net assets, end of period (in 000’s) |
$ | 56,869 | $ | 50,972 | $ | 53,363 | $ | 46,591 | $ | 40,659 | $ | 50,123 | ||||||||||||
| Ratio of expenses to average net assets |
1.25 | %(b) | 1.16 | % | 0.95 | % | 0.95 | % | 0.95 | % | 0.95 | % | ||||||||||||
| Ratio of net investment income to average net assets |
1.14 | %(b) | 0.97 | % | 0.92 | % | 0.97 | % | 1.38 | % | 0.98 | % | ||||||||||||
| Portfolio turnover |
8 | %(a) | 14 | % | 13 | % | 13 | % | 23 | % | 6 | % | ||||||||||||
| (a) | Not annualized. |
| (b) | Annualized. |
| (c) | Amount represents less than 0.005 per share. |
See Notes to Financial Statements
19
| GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) |
NOTE 1 — Organization and Significant Accounting Policies
Green Century Funds (the “Trust”) is a Massachusetts business trust which offers two separate series, the Green Century Balanced Fund (the “Balanced Fund”) and the Green Century Equity Fund (the “Equity Fund”), collectively, the “Funds”. The Trust is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end, diversified management investment company. The Trust accounts separately for the assets, liabilities and operations of each series. The Balanced Fund commenced operations on March 18, 1992 and the Equity Fund commenced operations on September 13, 1995.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The following is a summary of the Funds’ significant accounting policies:
| (A) | Investment Valuation: Equity securities listed on national securities exchanges other than NASDAQ are valued at last sale price. If a last sale price is not available, securities listed on national exchanges other than NASDAQ are valued at the mean between the closing bid and closing ask prices. NASDAQ National Market® and SmallCapSM securities are valued at the NASDAQ Official Closing Price (“NOCP”). The NOCP is based on the last traded price if it falls within the concurrent best bid and ask prices and is normalized pursuant to NASDAQ’s published procedures if it falls outside this range. If a NOCP is not available for any such security, the security is valued at the last sale price, or, if there have been no sales that day, at the mean between the closing bid and closing ask prices. Unlisted equity securities are valued at last sale price, or when last sale prices are not available, at the last quoted bid price. Debt securities (other than certificates of deposit and short-term obligations maturing in sixty days or less) are valued on the basis of valuations furnished by a pricing service which takes into account appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, and other market data, without exclusive reliance on quoted prices or exchange or over-the-counter prices, since such valuations are believed to reflect more accurately the fair value of the securities. Securities, if any, for which there are no such valuations or quotations available, or for which the market quotation is not reliable, are valued at fair value by management as determined in good faith under guidelines established by the Trustees. Certificates of deposit are valued at cost plus accrued interest, and short-term obligations maturing in sixty days or less are valued at amortized cost, both of which approximate market value. |
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1 — quoted prices for active markets for identical securities. An active market for the security is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value.
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) Quoted prices for identical or similar assets in markets that are not active. Investments valued at amortized cost. Inputs that are derived principally from or corroborated by observable market data. An adjustment to any observable input that is significant to the fair value may render the measurement a Level 3 measurement.
20
| GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) |
continued |
Level 3 — significant unobservable inputs, including the Fund’s own assumptions in determining the fair value of investments.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Balanced Fund’s net assets as of January 31, 2013:
| LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | |||||||||||||
| COMMON STOCKS |
$47,920,823 | $ — | $ — | $47,920,823 | ||||||||||||
| CORPORATE BONDS & NOTES |
— | 10,250,456 | — | 10,250,456 | ||||||||||||
| U.S. GOVERNMENT AGENCIES |
— | 4,483,672 | — | 4,483,672 | ||||||||||||
| CERTIFICATES OF DEPOSIT |
— | 95,000 | — | 95,000 | ||||||||||||
| SHORT-TERM OBLIGATIONS |
— | 3,922,448 | — | 3,922,448 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
$47,920,823 | $18,751,576 | $ — | $66,672,399 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
The following is a summary of the inputs used to value the Equity Fund’s net assets as of January 31, 2013:
| LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | |||||||||||||
| COMMON STOCKS |
$56,626,907 | $ — | $ — | $56,626,907 | ||||||||||||
| SHORT-TERM OBLIGATIONS |
— | 250,996 | — | 250,996 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| TOTAL |
$56,626,907 | $250,996 | $ — | $56,877,903 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
The Funds adopted the Financial Accounting Standards Board (“FASB”) amendments to authoritative guidance which require the Funds to disclose details of transfers in and out of Level 1 and Level 2 measurements and Level 2 and Level 3 measurements and the reasons for the transfers. For the six months ended January 31, 2013, there were no transfers in and out of Level 1, Level 2 and Level 3. Neither of the Funds held any Level 3 securities during the six months ended January 31, 2013. It is the Funds’ policy to recognize transfers into and out of all Levels at the end of the reporting period.
In May 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurements (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (“IFRSs”)” (“ASU No. 2011-04”). ASU No. 2011-04 requires additional disclosures regarding fair value measurements in financial statements of interim and annual periods beginning after December 15, 2011. The above disclosures reflect the requirements of ASU No. 2011-04.
| (B) | Securities Transactions and Investment Income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are determined using the identified cost basis. Interest income, including amortization of premiums and accretion of discounts on bonds, is recognized on the accrual basis and dividend income is recorded on ex-dividend date. |
| (C) | Options Transactions: The Balanced Fund may utilize options to hedge or protect from adverse movements in the market values of its portfolio securities and to enhance return. The Equity Fund is authorized to utilize options to hedge against possible increases in the value of securities which are expected to be purchased by |
21
| GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) |
continued |
| the Equity Fund or possible declines in the value of securities which are expected to be sold by the Equity Fund. The use of options involves risk such as the possibility of illiquid markets or imperfect correlation between the value of the option and the underlying securities. The Funds are also authorized to write put and call options. Premiums received upon writing put or call options are recorded as an asset with a corresponding liability which is subsequently adjusted to the current market value of the option. Changes between the initial premiums received and the current market value of the options are recorded as unrealized gains or losses. When an option is closed, expired or exercised, a gain or loss is realized and the liability is eliminated. The Funds continue to bear the risk of adverse movements in the price of the underlying assets during the period of the option, although any potential loss during the period would be reduced by the amount of the option premium received. As required by the Act, liquid securities are designated as collateral in an amount equal to the market value of open options contracts. In the six months ended January 31, 2013, neither the Balanced Fund nor the Equity Fund utilized options or wrote put or call options. |
| (D) | Repurchase Agreements: The Funds enter into repurchase agreements with selected banks or broker-dealers that are deemed by the Funds’ adviser to be creditworthy pursuant to guidelines established by the Board of Trustees. Each repurchase agreement is recorded at cost, which approximates fair value. The Funds require that the market value of collateral, represented by securities (primarily U.S. Government securities), be sufficient to cover payments of interest and principal and that the collateral be maintained in a segregated account with a custodian bank in a manner sufficient to enable the Funds to obtain those securities in the event of a default of the counterparty. In the event of default or bankruptcy by the counterparty to the repurchase agreement, retention of the collateral may be subject to legal proceedings. |
| (E) | Distributions: Distributions to shareholders are recorded on the ex-dividend date. The Funds declare and pay dividends of net investment income, if any, semi-annually and distribute net realized capital gains, if any, annually. The amount and character of income and net realized gains to be distributed are determined in accordance with Federal income tax rules and regulations, which may differ from U.S. GAAP. To the extent that these differences are attributable to permanent book and tax accounting differences, the components of net assets have been adjusted. |
| (F) | Federal Taxes: Each series of the Trust is treated as a separate entity for Federal income tax purposes. Each Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies (“RICs”). Accordingly, no provisions for Federal income or excise tax are necessary. |
In July 2006, the FASB issued Accounting for Uncertainty in Income Taxes. This interpretation addresses the accounting for uncertainty in income taxes and establishes for all entities, including pass-through entities such as the Funds, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction). The Funds recognize tax benefits only if it is more likely than not that a tax position (including the Funds’ assertion that their income is exempt from tax) will be sustained upon examination. The Funds adopted Accounting for Uncertainty in Income Taxes in fiscal year 2008. The Funds had no material uncertain tax positions and have not recorded a liability for unrecognized tax benefits as of January 31, 2013. Also, the Funds had recognized no interest and penalties related to uncertain tax benefits through January 31, 2013. At January 31, 2013, the tax years 2009 through 2012 remain open to examination by the Internal Revenue Service.
The Regulated Investment Company Modernization Act of 2010 (the “Act”) was signed into law on December 22, 2010. The Act makes changes to a number of the federal income and excise tax provisions impacting RICs, including simplification provisions on asset diversification and qualifying income tests, provisions aimed at preserving the character of the distributions made by the RIC and coordination of the income and excise tax distribution requirements, and provisions for allowing unlimited years carryforward for capital losses.
22
| GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) |
continued |
| (G) | Redemption Fee: A 2.00% redemption fee is retained by the Funds to offset the effect of transaction costs and other expenses associated with short-term investing. The fee is imposed on redemptions or exchanges of shares held 60 days or less from their purchase date. For the six months ended January 31, 2013, the Balanced Fund and Equity Fund received $1,448 and $3, respectively, in redemption fees. Redemption fees are recorded as an adjustment to paid-in capital. |
| (H) | Indemnification: The Fund’s organizational documents provide that trustees and officers are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote. |
NOTE 2 — Transactions With Affiliates
| (A) | Investment Adviser: Green Century Capital Management, Inc. (“Green Century”) is the adviser (“the Adviser”) for the Funds. Green Century is owned by Paradigm Partners. Green Century oversees the portfolio management of the Funds on a day-to-day basis. The Balanced Fund pays Green Century a fee, accrued daily and paid monthly, at an annual rate equal to 0.65% of the Balanced Fund’s average daily net assets. The Equity Fund pays Green Century a fee, accrued daily and paid monthly, at an annual rate of 0.25% of the Equity Fund’s average daily net assets up to but not including $100 million, 0.22% of average daily net assets including $100 million up to but not including $500 million, 0.17% of average daily net assets including $500 million up to but not including $1 billion and 0.12% of average daily net assets equal to or in excess of $1 billion. |
| (B) | Subadvisers: Trillium Asset Management, LLC (“Trillium”) is the subadviser for the Balanced Fund. Trillium is paid a fee by the Adviser at an annual rate of 0.40% on the first $30 million of average daily net assets and 0.35% on average daily net assets in excess of $30 million for its services. For the six months ended January 31, 2013, Green Century accrued fees of $116,834 to Trillium. Northern Trust Investments, Inc (“Northern Trust”) is the subadviser for the Equity Fund. Northern Trust is paid a fee by the Adviser based on Northern Trust’s fee schedule of the greater of $75,000 or 0.10% of the value of the average daily net assets of the Fund up to but not including $50 million, 0.05% of the average daily net assets of the Fund from and including $50 million up to but not including $100 million and 0.03% of the average daily net assets of the Fund equal to or in excess of $100 million for its services. For the six months ended January 31, 2013 Green Century accrued fees of $37,808 to Northern Trust. |
| (C) | Administrator: Green Century is the administrator (“the Administrator”) of the Green Century Funds. Pursuant to the Administrative Services Agreement, Green Century pays all the expenses of each Fund other than the investment advisory fees; interest; taxes; brokerage costs and other capital expenses; expenses of non-interested trustees (including counsel fees) and any extraordinary expenses. The Balanced Fund pays Green Century a fee at a rate such that immediately following any payment to the Administrator, the total operating expenses of the Fund, on an annual basis, do not exceed 1.48% of the Fund’s average daily net assets. The Equity Fund pays Green Century a fee at a rate such that immediately following any payment to the Administrator, the total operating expenses of the Fund, on an annual basis, do not exceed 1.25% of the Fund’s average daily net assets. |
| (D) |
Subadministrator: Pursuant to a Subadministrative Services Agreement with the Administrator, UMB Fund Services, Inc. (“UMBFS”) as Subadministrator, is responsible for conducting certain day-to-day administration of the Trust subject to the supervision and direction of the Administrator. For the six months |
23
| GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) |
continued |
| ended January 31, 2013, Green Century accrued fees of $48,394 and $48,394 to UMBFS related to services performed on behalf of the Balanced Fund and the Equity Fund, respectively. |
| (E) | Index Agreement: The Equity Fund invests in the securities of the companies included in the MSCI KLD 400 Social Index (the “Index”). The Index is owned and maintained by MSCI ESG Research (“MSCI”). For the use of the Index, MSCI is paid by the Adviser an annual license fee of $25,000, plus the greater of $25,000 or at an annual rate of 0.05% on the first $100 million of average daily net assets, 0.04% on the next $100 million of average daily net assets, and 0.03% on average daily net assets in excess of $200 million. For the six months ended January 31, 2013, Green Century accrued fees of $26,036 to MSCI. |
NOTE 3 — Investment Transactions
The Balanced Fund’s cost of purchases and proceeds from sales of securities, other than short-term securities, aggregated $7,439,184 and $7,567,463, respectively, for the six months ended January 31, 2013. The Equity Fund’s cost of purchases and proceeds from sales of securities, other than short-term securities, aggregated $4,788,166 and $4,286,506, respectively.
NOTE 4 — Federal Income Tax Information
The tax basis of the components of distributable net earnings (deficit) at July 31, 2012 were as follows:
| BALANCED FUND | EQUITY FUND | |||||||
| Undistributed ordinary income |
$ | — | $ | — | ||||
| Undistributed long-term capital gains |
— | — | ||||||
|
|
|
|
|
|||||
| Tax accumulated earnings |
— | — | ||||||
|
|
|
|
|
|||||
| Accumulated capital and other losses |
(4,544,719 | ) | (6,196,605 | ) | ||||
| Unrealized appreciation (depreciation) |
6,917,860 | 6,704,695 | ||||||
|
|
|
|
|
|||||
| Distributable net earnings (deficit) |
$ | 2,373,141 | $ | 508,090 | ||||
|
|
|
|
|
|||||
The Balanced Fund and the Equity Fund had accumulated short term capital loss carryforwards of $4,544,719 and $6,196,605, respectively, of which $1,145,912 and $1,484,742, respectively, expire in the year 2017, $3,398,807 and $3,699,763, respectively, expire in the year 2018 and $0 and $920,510, respectively, expire in the year 2019. The Equity Fund has $91,590 of long term capital loss carryforwards that are not subject to expiration. To the extent that a Fund realizes future net capital gains, those gains will be offset by any unused capital loss carryforwards.
Capital loss carryovers are available to offset future realized capital gains and thereby reduce further taxable gain distributions. During the year ended July 31, 2012, the Balanced Fund utilized $720,607, of their capital loss carryovers.
The tax character of distributions paid during the fiscal years ended July 31, 2012 and July 31, 2011 were as follows:
| BALANCED FUND | EQUITY FUND | |||||||||||||||
| YEAR ENDED JULY 31, 2012 |
YEAR ENDED JULY 31, 2011 |
YEAR ENDED JULY 31, 2012 |
YEAR ENDED JULY 31, 2011 |
|||||||||||||
| Ordinary income |
$ | 330,794 | $ | 457,006 | $ | 503,447 | $ | 534,364 | ||||||||
| Long-term capital gains |
— | — | — | — | ||||||||||||
24
| GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTS (unaudited) |
concluded |
NOTE 5 — Capital Share Transactions
Capital Share transactions for the Balanced Fund and the Equity Fund were as follows:
| BALANCED FUND | EQUITY FUND | |||||||||||||||
| SIX MONTHS ENDED JANUARY 31, 2013 |
YEAR ENDED JULY 31, 2012 |
SIX MONTHS ENDED JANUARY 31, 2013 |
YEAR ENDED JULY 31, 2012 |
|||||||||||||
| Shares sold |
260,647 | 230,554 | 138,275 | 483,235 | ||||||||||||
| Reinvestment of dividends |
15,463 | 18,606 | 14,108 | 24,932 | ||||||||||||
| Shares redeemed |
(140,567 | ) | (331,848 | ) | (126,711 | ) | (728,023 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| 135,543 | (82,688 | ) | 25,672 | (219,854 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
NOTE 6 — FASB Accounting Standards Codification Topic 815
The Funds adopted FASB ASC Topic 815, Disclosures about Derivative and Hedging (“ASC 815”). ASC 815 requires enhanced disclosures about (a) how an entity uses derivative instruments (b) how derivative instruments and hedging activities are accounted for, and (c) how derivative instruments and related hedging activities affect a Fund’s financial position and financial performance. This includes qualitative and quantitative disclosures on derivative positions existing as of January 31, 2013 or for the year then ended and the affect of using derivatives during the year. Neither of the Funds held any derivative positions as of and for the six months ended January 31, 2013.
NOTE 7 — Recent Accounting Pronouncements
In December 2011, FASB issued ASU No. 2011-11 related to disclosures about offsetting assets and liabilities. The amendments in this ASU require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The guidance requires retrospective application for all comparative periods presented. As of January 31, 2013, management is evaluating the impact ASU No. 2011-11 will have on the financial statement disclosures.
NOTE 8 — Subsequent Events
Subsequent to January 31, 2013 and through the date on which the financial statements were available for issuance, management has evaluated subsequent events and concluded there were no subsequent events requiring accrual or disclosure.
25
BOARD OF TRUSTEES’ CONSIDERATION OF ADVISORY AND SUBADVISORY AGREEMENTS
The Board of Trustees of the Green Century Funds considered and approved the continuance of four advisory and subadvisory agreements during the six months ended January 31, 2013.
INVESTMENT ADVISORY AGREEMENTS WITH GREEN CENTURY CAPITAL MANAGEMENT, INC.
The Board, including the Independent Trustees, approved the continuance of the Investment Advisory Agreements (the “Advisory Agreements”) between the Trust, on behalf of the Balanced Fund and the Equity Fund (the “Funds” and each a “Fund”), and Green Century Capital Management (“Green Century” or the “Adviser”), at a meeting on September 28, 2012. In connection with their deliberations at the meeting, and in separate executive session of the Independent Trustees, the Trustees considered, among other things, information provided by Green Century regarding the investment performance of each Fund; the expenses of each Fund and the advisory fee paid to Green Century by each Fund; and the profitability to Green Century of its advisory relationship with each Fund. The Independent Trustees were assisted by independent counsel in considering these materials and the approval and continuance of the Advisory Agreements. The Trustees considered all the information provided to them by Green Century, including information provided throughout the year. In approving the Advisory Agreements, the Board, including the Independent Trustees, did not identify any single factor as determinative. Matters considered in connection with their approval of the Advisory Agreements included the following.
Nature, Quality, and Extent of Services Performed. The Trustees considered the scope and quality of the services performed for each of the Funds by the Adviser, including the resources dedicated by the Adviser. With respect to the Equity Fund, these services included monitoring the Equity Fund’s performance and tracking error relative to the MSCI KLD 400 Social Index (the “Index”); implementing the environmental and other policies of the Trust by voting the Equity Fund’s shareholder proxies; and overall compliance oversight provided by the Adviser. The Trustees also considered the Adviser’s supervision of Northern Trust Investments, Inc. (“Northern Trust”), the subadviser of the Equity Fund, which performs day-to-day portfolio management for the Fund.
With respect to the Balanced Fund, the services performed included the oversight and monitoring of the portfolio management and performance of the Balanced Fund; monitoring the implementation of the Balanced Fund’s environmental screens; implementing the environmental and other policies of the Trust by voting the Balanced Fund’s shareholder proxies; and overall compliance oversight provided by the Adviser. The Trustees also considered the Adviser’s supervision of Trillium Asset Management, LLC (“Trillium”), the subadviser of the Balanced Fund, which performs the day-to-day portfolio management for the Fund.
In addition, the Trustees considered the administrative services provided by the Adviser to both Funds under a separate agreement, including the coordination of the activities of the Funds’ other service providers. Based on its review of all of the services provided, the Trustees concluded that the nature, quality, and extent of services provided by the Adviser supported the continuance of the Advisory Agreements with respect to the Equity Fund and the Balanced Fund.
Investment Performance. With respect to the Equity Fund, the Trustees considered that due to the Equity Fund’s passive investment strategy, the principal concern with regard to investment performance was the extent to which the Equity Fund tracked the Index. The Trustees reviewed the performance of the Equity Fund, exclusive of the expenses of the Fund, as compared to that of the Index for the periods ended July 31, 2012, and noted that the Equity Fund’s performance closely followed that of the Index. In particular, they observed that 9 basis points of the Equity Fund’s one-year variance from the Index’s performance was attributable to factors other than Fund fees and expenses. After considering all the factors deemed appropriate, the Trustees, including the Independent Trustees, concluded that the performance of the Equity Fund supported the continuance of the Advisory Agreement with respect to the Equity Fund.
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With respect to the Balanced Fund, the Trustees reviewed and considered information regarding the investment performance of the Balanced Fund and comparative data with respect to the performance of other funds designated by Morningstar to have similar investment objectives as well as the Balanced Fund’s performance measured against the Lipper Balanced Fund Index (“Lipper”), which is a broad-based balanced fund market index, and a custom balanced index (“Custom Index”) comprised of a 60% weighting in the S&P 1500 Index and a 40% weighting in the BofA Merrill Lynch 1-10 Year US Corporate and Government Index. The Trustees noted that as of the period ended August 31, 2012, the Balanced Fund’s one year average annual return outperformed the Lipper, its three- and five-year average annual returns underperformed the Lipper, and its ten-year average annual return, outperformed the Lipper. The Trustees also noted that as of the period ended August 31, 2012, the Balanced Fund’s one-, three- and five-year average annual returns had underperformed the Custom Index, and its ten-year average annual returns had outperformed the Custom Index. The Trustees also considered the performance information they had been provided throughout the year. After weighing all the factors deemed appropriate, including the environmental screens applied to the Fund’s investment process, the Trustees, including the Independent Trustees, concluded that the performance of the Balanced Fund supported the continuance of the Advisory Agreement with respect to the Balanced Fund.
The Costs of Services Provided and Profitability. The Trustees considered the costs of the services provided to the Funds and the profitability and fall-out benefits to the Adviser from its arrangements with the Funds.
The Trustees reviewed and considered an analysis of the advisory fees and total expenses ratios of each Fund and comparative data for multiple categories of mutual funds included in and as defined by Morningstar’s mutual fund database of over 7,000 mutual funds. For the Equity Fund, the Trustees noted that, based on the information provided, the Fund’s advisory fee was lower than the average advisory fee for socially conscious funds by 37 basis points and lower than that of the average growth and income funds by 22 basis points. The Trustees also noted that the total expense ratio of the Equity Fund was set at 1.25%, and that the total expense ratio was higher than that of the average of socially conscious funds by 7 basis points and higher than that of the average of all growth and income funds by 30 basis points, and higher than that of the average growth and income index funds by 73 basis points. For the Balanced Fund, the Trustees noted that, based on the information provided, the Fund’s advisory fee was higher than the average advisory fee for socially conscious funds (by 3 basis points), socially conscious balanced Funds (by 11 basis points), all balanced funds (by 18 basis points) and balanced funds which have under $100 million in assets (by 16 basis points). The Trustees also noted that the total expense ratio of the Balanced Fund was set at 1.48% and that the total expense ratio was higher than that of the average of socially conscious funds by 30 basis points, higher than that of the average of socially conscious balanced funds by 54 basis points, higher than that of the average of all balanced funds by 44 basis points, and higher than that of the average of balanced funds with assets less than $100 million by 33 basis points.
Green Century provided the Trustees with information relating to the profitability to Green Century of its advisory relationships to the Funds. The Trustees noted that based on information provided by Green Century, the relationship was not profitable. In that regard, the Trustees considered the subadvisory fees and the other expenses incurred by the Adviser in providing advisory services to the Funds. The Trustees also considered the fee received by Green Century for providing administrative services to the Funds and the expenses incurred in providing those services. In considering the cost allocation methodology used by Green Century, the Trustees took into consideration that the Adviser does not provide advisory or administrative services to other mutual funds or non-mutual fund clients. The Trustees also considered Green Century’s non-profit ownership structure, its cost structure and personnel needs, and its investment in shareholder advocacy to further the Funds’ stated intention to promote greater corporate environmental accountability. After reviewing the information described above, the Independent Trustees concluded that the fees specified in the Advisory Agreements, taking into account the costs of the services provided by the Adviser and the profitability to the Adviser of its relationships with the Funds, supported the continuance of the Advisory Agreements with respect to the Equity Fund and the Balanced Fund.
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Other Benefits. With respect to fall-out benefits, the Trustees considered that neither Green Century nor any affiliate of Green Century receives any brokerage fees, soft dollar benefits, liquidity rebates from electronic communications networks or payments for order flow from the trades executed for either Fund. The Trustees noted that Green Century does potentially benefit from its relationship with the Funds due to the Funds’ reputation as the first family of no-load environmentally responsible mutual funds. The Trustees considered that the association with the Funds supports Green Century’s own stated mission of advocating for corporate environmental responsibility. Further, pursuant to the Advisory Agreements, Green Century has reserved for itself the rights to the names “Green Century Funds” and any similar names; thus, Green Century may benefit in the future from developing other funds or investment products with the Green Century brand. The Trustees concluded that the fall-out benefits to be realized by Green Century were appropriate and supported the continuance of the Advisory Agreements with respect to the Equity Fund and the Balanced Fund.
Economies of Scale. The Trustees also considered whether economies of scale could be realized by the Adviser as the Funds grew in asset size and the extent to which such economies of scale were reflected in the level of fees charged. They noted the relatively small size of each Fund and the resultant difficulty of achieving meaningful economies of scale. They considered that if the assets were to increase, the Funds could have the opportunity to experience economies of scale as fixed costs would become a smaller percentage of the Funds’ assets and some of the Funds’ service providers’ fees, as a percentage of the Funds’ assets, could decrease. The Trustees noted that the advisory fee structure for the Equity Fund included break-points that would cause the advisory fee to decrease as a percentage of net assets as the Fund increased in size. The Trustees concluded that economies of scale could be realized as the Funds grew and that if assets increased significantly the Trustees would have opportunities to negotiate decreases in fees with the Adviser.
Based on a review of all factors deemed relevant, the Trustees, including the Independent Trustees, concluded that the Advisory Agreements with respect to the Balanced Fund and the Equity Fund should be continued for an additional one-year period.
INVESTMENT SUBADVISORY AGREEMENT WITH TRILLIUM ASSET MANAGEMENT LLC RELATING TO THE BALANCED FUND
At the meeting on September 28, 2012, the Board of Trustees of the Balanced Fund, including a majority of the Independent Trustees, considered the continuance of the subadvisory agreement between the Trust, on behalf of the Balanced Fund, Green Century, and Trillium (the “Subadvisory Agreement”). In connection with their deliberations at the meeting, and in separate executive session of the Independent Trustees, the Trustees considered, among other things, information provided by Trillium regarding the investment performance of the Balanced Fund, the subadvisory fees paid to Trillium, and the profitability to Trillium of its subadvisory relationship to the Balanced Fund. The Independent Trustees were assisted by independent counsel in considering these materials and the continuance of the Subadvisory Agreement. The Trustees considered all the information provided to them by Trillium, including information provided throughout the year. In approving the continuance of the Subadvisory Agreement, the Board, including the Independent Trustees, did not identify any single factor as determinative. Matters considered in connection with their approval of the Subadvisory Agreement included the following.
Nature, Quality, and Extent of Services Performed. The Trustees noted that under the terms of the Subadvisory Agreement, Trillium provided the day-to-day portfolio management of the Balanced Fund, including determining asset and sector allocation; conducting securities selection and discovery; researching and analyzing environmental policies and practices of companies and implementing the Balanced Fund’s environmental screening criteria; managing the volatility, risk, and turnover of the portfolio; and investing the portfolio consistent with the Balanced Fund’s investment objective and policies. The Trustees considered the professional expertise, tenure, and qualifications of the portfolio management team and noted that Trillium was devoted exclusively to environmentally and socially responsible investing and managed over $1 billion in assets. The Trustees also considered Trillium’s compliance record as well as the professional experience and responsiveness of Trillium’s compliance staff. The Trustees also considered Trillium’s leadership in social and environmental responsibility, including its shareholder advocacy efforts.
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Based on its review of all of the services provided and to be provided, the Trustees concluded that the nature, quality, and extent of services provided by Trillium supported the continuance of the Subadvisory Agreement.
Investment Performance. The Trustees reviewed and considered information regarding the investment performance of the Balanced Fund and comparative data with respect to the performance of mutual funds with similar investment objectives as well as other broad-based market indexes. The Trustees noted that as of the period ended August 31, 2012, the Balanced Fund’s one year average annual return outperformed the Lipper, its three- and five-year average annual returns underperformed the Lipper, and its ten-year average annual return, outperformed the Lipper. The Trustees also noted that as of the period ended August 31, 2012, the Balanced Fund’s one-, three- and five-year average annual returns had underperformed the Custom Index, and its ten-year average annual returns had outperformed the Custom Index. Trillium became the Balanced Fund’s subadviser on November 28, 2005. After considering all the factors deemed appropriate, the Trustees concluded that the performance of the Balanced Fund together with Trillium’s investment process, philosophies and experience in environmentally and socially responsible investing, supported the continuance of the Subadvisory Agreement.
Costs of Services Provided and Profitability. The Trustees considered that the subadvisory fees paid by Green Century to Trillium under the Subadvisory Agreement were 0.40% of the value of the average daily net assets of the Balanced Fund up to $30 million, and 0.35% of the value of the average daily net assets of the Balanced Fund in excess of $30 million. The Trustees also considered that the subadvisory fees are paid by Green Century, and are not in addition to the advisory fees paid to Green Century by the Balanced Fund.
In evaluating the profitability of the Subadvisory Agreement to Trillium, the Trustees noted that based on information provided by Trillium, the relationship was slightly profitable. The Trustees noted that Trillium stated that it would not realize a level of profitability similar to that of its other advisory clients on the management of the Balanced Fund until assets approach $100 million. The Trustees considered the financial resources Trillium dedicated and the other expenses Trillium incurred in providing subadvisory services to the Balanced Fund, including startup costs relating to the relationship, and additional personnel, legal, trading analysis and compliance costs required in the context of providing subadvisory services to a mutual fund. In considering the cost allocation methodology used by Trillium, the Trustees took under consideration that Trillium does not provide advisory or subadvisory services to other mutual fund clients. The Trustees also considered Trillium’s fee structure and noted, based on the information provided, that the subadvisory fees were lower than the fees Trillium would charge under its published standard fee schedule to institutional clients with separate accounts of similar size as the Balanced Fund.
After reviewing the information described above, the Trustees concluded that the fees specified in the Subadvisory Agreement, taking into account the nature and quality of services provided and the costs of the services provided by Trillium, supported the continuance of the Subadvisory Agreement.
Other Benefits. The Trustees evaluated potential other benefits Trillium may realize from its relationship with the Balanced Fund. The Trustees considered the brokerage practices of Trillium, including the soft dollar commissions that were generated with respect to the Balanced Fund’s portfolio transactions. The Trustees considered that Trillium was not affiliated with a broker/dealer and therefore no benefit would be realized by Trillium through transactions with affiliated brokers. The Trustees also considered the reputational and other advantages Trillium may gain from its relationship with the Balanced Fund. The Trustees concluded that the benefits received by Trillium were reasonable in the context of the relationship between Trillium and the Balanced Fund, and supported the continuance of the Subadvisory Agreement.
Economies of Scale. The Trustees also considered whether economies of scale would be realized by Trillium as the Balanced Fund grew in asset size and the extent to which such economies of scale might be reflected in the subadvisory
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fees. They noted the relatively small size of the Balanced Fund and considered that if the assets were to increase, Trillium could have the opportunity to experience economies of scale. They also noted that pursuant to the Subadvisory Agreement, the subadvisory fees paid to Trillium by Green Century (out of its flat 0.65% advisory fee) include a breakpoint at $30 million, so that fees as a percentage of net assets decrease as assets in the Balanced Fund increase. The Trustees concluded that economies of scale could be realized as the Fund grew, and that the fee schedule as specified was appropriate, and supported the continuance of the Subadvisory Agreement.
Based on a review of all factors deemed relevant, the Trustees, including the Independent Trustees, concluded that the Subadvisory Agreement should be continued for an additional one-year period.
INVESTMENT SUBADVISORY AGREEMENT WITH NORTHERN TRUST INVESTMENTS, INC. RELATING TO THE EQUITY FUND
At the meeting on September 28, 2012, the Board of Trustees of the Equity Fund, including a majority of the Independent Trustees, considered the continuance of the subadvisory agreement between the Trust, on behalf of the Equity Fund, Green Century, and Northern Trust (the “Subadvisory Agreement”). In connection with their deliberations at the meeting, and in separate executive session of the Independent Trustees, the Trustees considered, among other things, information provided by Northern Trust regarding the investment performance of the Equity Fund, including the success with which the Fund tracked the Index, the subadvisory fees paid to Northern Trust, and the profitability to Northern Trust of its subadvisory relationship to the Equity Fund. The Independent Trustees were assisted by independent counsel in considering these materials and the continuance of the Subadvisory Agreement. The Trustees considered all the information provided to them by Northern Trust, including information provided throughout the year. In approving the continuance of the Subadvisory Agreement, the Board, including the Independent Trustees, did not identify any single factor as determinative. Matters considered in connection with their approval of the Subadvisory Agreement included the following.
Nature, Quality, and Extent of Services Performed. The Trustees noted that under the terms of the Subadvisory Agreement, Northern Trust provided the day-to-day portfolio management of the Equity Fund, making purchases and sales of portfolio securities consistent with the Equity Fund’s investment objective and policies and with changes to the Index. The Trustees considered the professional expertise, tenure, and qualifications of the portfolio management team as well as the team’s experience in passive management. The Trustees also considered Northern Trust’s handling of daily inflows and outflows, transaction costs, tracking error, and the portfolio turnover rates for the Equity Fund. The Trustees also considered Northern Trust’s compliance record as well as the professional experience and responsiveness of Northern Trust’s compliance staff.
Based on its review of all of the services provided and to be provided, the Trustees concluded that the nature, quality, and extent of services provided by Northern Trust supported the continuance of the Subadvisory Agreement.
Investment Performance. The Trustees considered that the Equity Fund follows a passive investment strategy designed to track the Index and therefore the analysis of its investment performance should be based on the extent to which the Equity Fund successfully tracked the Index. The Trustees reviewed the performance of the Equity Fund, exclusive of the expenses of the Fund, as compared to that of the Index for the periods ended July 31, 2012, and noted that the Equity Fund’s performance closely followed that of the Index. In particular, they observed that 9 basis points of the Equity Fund’s one-year variance from the Index’s performance was attributable to factors other than Fund fees and expenses. After considering all the factors deemed appropriate, the Trustees concluded that the performance of the Equity Fund together with Northern Trust’s investment process and experience in passive portfolio management supported the continuance of the Subadvisory Agreement.
Costs of Services Provided and Profitability. The Trustees considered that the subadvisory fees paid by Green Century to Northern Trust under the Subadvisory Agreement were 0.10% of the value of the average daily net assets of the
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Equity Fund up to but not including $50 million, 0.05% of the value of the average daily net assets of the Equity Fund from and including $50 million up to but not including $100 million, and 0.03% of the value of the average daily net assets of the Equity Fund equal to or in excess of $100 million. There is a minimum fee of $75,000 per annum, which based on the Equity Fund’s net assets as of August 31, 2012 translated to an annual fee of approximately 0.14%. The Trustees also considered that the subadvisory fees are paid by Green Century, and are not in addition to the advisory fees paid to Green Century by the Equity Fund.
The Trustees reviewed and considered an analysis of the subadvisory fees against comparative data for index funds managed by Northern Trust and for similar socially responsible index funds. The Trustees noted that the Fund paid subadvisory fees comparable to those paid to Northern Trust by other subadvised index funds with under $100 million in assets. In evaluating the profitability of the Subadvisory Agreement to Northern Trust, the Trustees noted that Northern Trust does not calculate earnings at the subadvisory client level. Nevertheless, Northern Trust noted that it is continuing to grow its assets under management, including a significant amount of assets in the socially responsible mutual fund market.
After reviewing the information described above, the Trustees concluded that the fees specified in the Subadvisory Agreement, taking into account the nature and quality of services provided and the costs of the services provided by Northern Trust, supported the continuance of the Subadvisory Agreement.
Other Benefits. The Trustees evaluated potential other benefits Northern Trust may realize from its relationship with the Equity Fund. The Trustees considered the brokerage practices of Northern Trust, including that Northern Trust does not trade for the Equity Fund through its affiliated broker. The Trustees also considered that no soft dollars have been or will be paid in connection with Northern Trust’s management of the Equity Fund. The Trustees further considered the reputational and other advantages Northern Trust may gain from its relationship with the Equity Fund, including that Northern Trust’s management of the Equity Fund will broaden its exposure to the socially responsible mutual fund market, which may assist in its marketing efforts. The Trustees concluded that the benefits received by Northern Trust were reasonable in the context of the relationship between Northern Trust and the Equity Fund, and supported the continuance of the Subadvisory Agreement.
Economies of Scale. The Trustees also considered whether economies of scale would be realized by Northern Trust as the Equity Fund grew in asset size and the extent to which such economies of scale might be reflected in the subadvisory fees. They noted the relatively small size of the Equity Fund and considered that if the assets were to increase, Northern Trust could have the opportunity to experience economies of scale. They also noted that pursuant to the Subadvisory Agreement, the subadvisory fees paid to Northern Trust by Green Century (out of its advisory fee, which is subject to breakpoints) include breakpoints at $50 million and $100 million (subject to a minimum annual fee of $75,000), so that fees as a percentage of net assets decrease as assets in the Equity Fund increase. The Trustees concluded that economies of scale could be realized as the Fund grew, and that the fee schedule as specified was appropriate, and supported the continuance of the Subadvisory Agreement.
Based on a review of all factors deemed relevant, the Trustees, including the Independent Trustees, concluded that the Subadvisory Agreement should be continued for an additional one-year period.
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Semi-Annual Report
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An investment for your future.
Printed on recycled paper with soy-based ink. |
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Equity Fund |
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Item 2. Code of Ethics
Not applicable to semi-annual reports.
Item 3. Audit Committee Financial Expert
Not applicable to semi-annual reports.
Item 4. Principal Accountant Fees and Services
Not applicable to semi-annual reports.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Included as part of the report to shareholders filed under item 1 of this Form N-CSR
Item 7.Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees.
Item 11. Controls and Procedures
| (a) | Based on an evaluation of the disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended, the “Disclosure Controls”) as of a date within 90 days of the filing date (the “Filing Date”) of this Form N-CSR (the “Report”), the registrant’s principal executive officer and principal financial officer have concluded that the Disclosure Controls are effectively designed to ensure that information that is required to be disclosed by the registrant in the Report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that information required to be disclosed in the Report is accumulated and communicated to the registrant’s management, including the registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. |
| (b) | There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30 a-3(d) under the Investment Company Act of 1940) that occurred during the fiscal period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Exhibits
| (a)(1) | Not applicable. | |
| (2) | Certifications for each principal executive and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, (17 CFR 270.30a-2(a)) are filed herewith. | |
| (b) | Certifications required by Rule 30a-2 (b) under the Investment Company Act of 1940, as amended, (17 CFR 270.30a-2 (b)) are filed herewith. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Green Century Funds
/s/ Kristina Curtis
Kristina A. Curtis
President and Principal Executive Officer
April 10, 2013
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Kristina Curtis
Kristina A. Curtis
President and Principal Executive Officer
April 10, 2013
/s/ Kristina Curtis
Kristina A. Curtis
Treasurer and Principal Financial Officer
April 10, 2013