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: July 31, 2014
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)
ANNUAL REPORT Green Century Balanced Fund Green Century Equity Fund July 31, 2014 |
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:
Over the past year, Green Century Capital Management (Green Century) has continued to put one of our guiding principles – Investing in a Green Future – into practice in multiple ways. We want to share with you some important updates on your investments and the advocacy work that we do.
Leading on Fossil Fuel Free Investing and Reinvestment
Green Century has become a leader in the investment advisory field on fossil fuel free investing, a strategy tailored for investors who are making choices with the future in mind. As a result, Green Century Capital Management’s President Leslie Samuelrich appeared on CNBC’s Closing Bell in April with the headline “Making Green by Going Green.”
We also sent a short animated video explaining fossil fuel free investing to nearly one million people, spoke at events from York, Maine to San Francisco, California and shared our “Extracting Fossil Fuels from Your Portfolio” Guide with new and seasoned investors.
Funds Reach Record Highs
As more people and institutions have learned about Green Century, both the Balanced Fund and the Equity Fund have reached record highs – together reaching over $215 million in assets. The Green Century Funds have gathered more individual and institutional investors than at any time in our history. Thank you for investing with Green Century and referring friends and colleagues to us – it is an invaluable way to help others seek competitive returns while aligning their investments with their values.
The Green Century Equity Fund Becomes Entirely Fossil Fuel Free
On April 1, 2014, the Green Century Equity Fund became entirely fossil fuel free. With this update, Green Century became the first and only family of responsible, diversified mutual funds that is 100% free of fossil fuel companies. While the Equity Fund already did not hold coal or major oil companies, it now also avoids gas companies, many of which are susceptible to increasing reputational risks and potential investment risks as a result of hydraulic fracturing, or fracking. The Equity Fund will continue to invest in the companies that comprise the longest-running sustainable investment index, now minus the fossil fuel companies in that index.
This type of transformative move is nothing new for Green Century – we have been leaders in building the sustainable investment movement from our beginning over 23 years ago. Green Century’s innovations include the sustainability criteria we use to build the Funds’ portfolios, leading tangible and successful shareholder advocacy campaigns, and educating investors about their ability to support clean technologies.
Moving out of investments in fossil fuel companies may also protect investors against the potential of devalued assets in the future. In the last six months, many studies and reports have highlighted the potential risks that investments in these heavy carbon-producing industries can hold.
Securing Wins Through Shareholder Advocacy
Our track record of success in helping corporations adopt green practices has continued to build with our recent victories.
This winter, Green Century announced a precedent-setting policy with Kellogg’s1 that not only reduces carbon emissions, but also protects the habitats of endangered species like orangutans and Sumatran tigers, by changing the way that palm oil plantations are grown. Palm oil, which is the most widely used vegetable oil in the world and found in products from shampoo to snack foods, is all too often grown in plantations created by burning bio-diverse rainforests.
This spring, Green Century built on this success by working with General Mills,1 Smucker’s1 and ConAgra1 to secure agreements to purchase only certified deforestation-free palm oil.
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
Lucia von Reusner (right), shareholder advocate at Green Century, standing with Diane Holdorf, Chief Sustainability Officer at Kellogg’s, at Kellogg’s annual meeting of shareholders. At the meeting, Green Century thanked the company for its leadership on adopting a responsible palm oil sourcing strategy.
2
Green Century on the Web
E-News. For more regular updates on the Green Century Funds and on our advocacy efforts, please consider signing up for our e-newsletter. Call 1-800-93-GREEN/1-800-934-7336, visit: www.greencentury.com/contact-us/sign-up, or email info@greencentury.com.
Online Access. Information on your account is available on our website at www.greencentury.com. From the home page, click on Access My Account. Shareholders may also perform online transactions on the site. While there, please consider registering for e-delivery of your statements and other fund documents.
Twitter. Green Century is on Twitter. Follow us at Twitter.com/Green__Century for a sustainable investor’s perspective on critical issues.
The Green Century Funds’ proxy voting guidelines and a record of the Funds’ proxy votes for the year ended June 30, 2014 are available without charge, upon request, (i) at www.greencentury.com, (ii) by calling 1-800-93-GREEN/1-800-934-7336, (iii) by 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/1-800-934-7336, or by e-mailing a request to info@greencentury.com.
3
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE (unaudited)
GREEN CENTURY BALANCED FUND
Investment Objective 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 responsibility.
Portfolio Orientation As of the fiscal year ended July 31, 2014, the Green Century Balanced Fund (the Balanced Fund or the Fund) was diversified in a number of ways. Equity holdings represented 66.5% and bonds constituted 25.1% of the Fund’s net asset value. The Fund also held 0.1% of its net assets in a community investment certificate of deposit and had 8.3% invested in cash, cash equivalents and other assets, less liabilities. The portfolio managers view equities as the primary source of potential long-term growth, while emphasizing the importance of diversification in seeking to lower volatility. The Fund’s equity holdings were diversified across 81 equity holdings at fiscal year-end, none of which represented more than 2.5% of total net assets. Generally, larger, less-volatile companies constituted larger positions in the Fund’s portfolio than smaller companies. The portfolio managers seek to mitigate risk by investing primarily in companies they believe have demonstrated records of profitability, above-average growth prospects and reasonable valuations.
As of July 31st, the stocks held by the Balanced Fund were also diversified by industry, with (as a percent of total net assets) Technology Hardware and Equipment (7.4%), Capital Goods (6.8%), Pharmaceuticals & Biotechnology (6.5%), and Banks (5.4%), as the largest of 23 separate industry groupings.
In line with its environmental mandate, the Fund had exposure to what Green Century considers environmental leaders in a number of industries including Healthy Living, Capital Goods and Transportation. Green Century’s environmental screens keep the Fund out of traditional energy and utility companies, while the Fund has broad exposure to information technology, health care, financial, consumer and industrial companies.
GREEN CENTURY BALANCED FUND
INVESTMENT BY INDUSTRY (unaudited)
4
In addition to its equity exposure to environmental leaders, the Fund invests in designated Green Bonds. The issuers of Green Bonds have indicated that the proceeds from the bonds will be used for greenhouse gas reduction, climate adaptation, and climate change mitigation. As of July 31st, 6.1% of the total portfolio and 24.4% of the market value of the bonds held in the Fund were designated Green Bonds.
Higher quality, intermediate maturity bonds can typically lower volatility and provide a stable source of income. At fiscal year end, the Balanced Fund held 46 bonds diversified across corporate and government agency issuers. In an effort to dampen volatility, the weighted average maturity (4.41 years) and duration (3.91 years) remained in the intermediate-range. The weighted average yield to maturity was 1.81%. As of July 31, 2014, 0.4% of the net assets of the Balanced Fund were invested in below investment grade securities, as rated by Moody’s Investor Service.
Economic Environment. In July 2014, economic reports showed signs of renewed U.S. economic growth, especially in employment figures, in the view of the portfolio managers of the Fund. On a month-to-month basis, new jobs created can be quite variable, but the twelve month average provides solid guidance to the strength of the economy. Almost 2.5 million jobs were created in the past year, the most for any twelve month period since May of 2006. Aggregate hours worked expanded in the first quarter, another sign of an improving economy. While housing starts are at less than half the 2005 rate, they are at twice the rate seen in the 2009 to 2011 period, and continue to strengthen. The portfolio managers believe that recovery in housing construction is even more important than recovery in housing prices as a stimulus to the economy. At the same time, consumer price inflation remains quiescent, anchored in the 1.6% to 2.2% range. As long as inflation remains in this low and limited range, the Federal Reserve will continue to have flexibility in the pace at which it tapers off from quantitative easing. Consumer confidence, boosted by the stronger job growth, is also improving, and the Consumer Confidence Index® produced by the Conference Board is now at its highest level since October 2007.
The advance estimate of real Gross Domestic Product (GDP, the output of goods and services produced by labor and property located in the United States) indicated that growth increased at an annual rate of 4.0% in the second quarter of 2014, in contrast to the first quarter decrease of 2.1%. Over the past twelve months, real GDP increased by 2.4%. The Fund’s portfolio managers anticipate that U.S. growth will be approximately 3.5% for the next twelve months.
In contrast to conditions in the U.S., the Fund’s portfolio managers expect continued weak economic growth in Europe. They anticipate that Euro-zone economic growth will be between 1% and 1.5% for the next twelve months. Chinese economic growth is likely to continue at a 7% to 8% range. Worldwide, many countries, such as Italy, Greece, Spain, Portugal, and Argentina, continue to struggle with the after-effects of the financial crisis of 2007 to 2009, experiencing high unemployment and poor or declining economic growth. As a result, the Fund’s portfolio managers have emphasized companies with strong domestic sales over companies with primarily international sales.
Investment Strategy and Performance. Green Century believes that environmental responsibility may enhance corporate profitability, which in turn may produce competitive returns. Environmentally sound companies may enjoy higher profitability through lower costs and participation in growth sectors of the market. In addition, this investment strategy seeks to avoid companies at risk due to exposure to
5
environmental liabilities. As of July 31, 2014, the Fund’s portfolio managers believe that the balance of prospective risks and rewards favors stocks, with prospective returns in stocks significantly higher than those for bonds. Accordingly, the portfolio managers are currently emphasizing stocks over bonds.
The Balanced Fund holds a number of stocks which the portfolio managers believe have attractive environmental and financial characteristics. Holdings include Sealed Air1 (technologies to keep food fresh), Wabtec1 (environmentally friendly locomotives and aftermarket services), and ABB Limited1 (automation technologies that enable utility and industry customers to improve performance while lowering environmental impact).
The Fund holds $7.5 million in Green Bonds and Notes including notes issued by African Development Bank,1 Bank of America,1 Export Import Bank of Korea,1 International Finance Corp.,1 International Bank for Reconstruction and Development (World Bank),1 Regency Centers LP,1 Vornado Realty,1 and Overseas Private Investment Corp.1
For the year ending July 31, 2014, the Balanced Fund’s returns were 11.20%, outperforming the 10.76% return for its Custom Balanced Index,2 an index comprised of the S&P 1500 Index2 (60% weighting) and of the BofA Merrill Lynch 1-10 Year US Corporate and Government Index2 (40% weighting).* The Fund also outperformed the 11.15% return of the Lipper Balanced Index2 for the same twelve month period.
Green Century Balanced Fund Total expense ratio: 1.48% | AVERAGE ANNUAL RETURN* | |||||||||||||||||
One Year | Three Years | Five Years | Ten Years | |||||||||||||||
June 30, 2014 | Green Century Balanced Fund | 18.05% | 11.20% | 12.45% | 5.48% | |||||||||||||
Custom Balanced Index2 | 15.72% | 11.10% | 13.24% | 6.87% | ||||||||||||||
Lipper Balanced Fund Index2 | 16.25% | 9.74% | 12.50% | 6.51% | ||||||||||||||
July 31, 2014 | Green Century Balanced Fund | 11.20% | 11.30% | 10.77% | 6.27% | |||||||||||||
Custom Balanced Index | 10.76% | 10.95% | 11.84% | 6.94% | ||||||||||||||
Lipper Balanced Fund Index | 11.15% | 9.58% | 10.93% | 6.58% |
* 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 Fund prices and performance information as of the most recent month-end, call 1-800-93-GREEN/1-800-934-7336. 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.
A comparison of the Fund’s equity holdings to the S&P 1500 Supercomposite Index (the S&P 1500),2 which like the Fund includes stocks across a range of capitalizations, provides some insight into relative performance; for the fiscal year ended July 31, 2014, the stocks held by the Balanced Fund outperformed those included in the S&P 1500, 17.23% versus 14.86%. A performance attribution analysis provided by the Fund’s portfolio manager indicates that the Fund’s Health Care, Telecommunication Services, Information Technology, Materials, and Utilities equity investments boosted the Fund’s performance, while its Consumer Staples, Industrials, and Financial Services investments provided weaker returns relative to the S&P 1500. In the U.S. equity market, Energy stock returns were higher than the overall market, and therefore the Fund’s policy of non-investment in fossil-fuel companies subtracted from investment performance over the year.
6
The companies held in the portfolio that contributed most toward the Fund’s equity performance relative to the S&P 1500 included Shire PLC,1 NXP Semiconductors,1 SanDisk Corporation,1 Gilead Sciences, Inc.,1 and Canadian Pacific Railway.1 Companies the Fund held that detracted most from performance relative to the S&P 1500 included Whole Foods Market,1 Interface,1 Symantec,1 J. M. Smucker, and Panera Bread Company.1
The fixed income portion of the portfolio continued to be managed with the goal of seeking to balance or offset risks associated with the Fund’s investment in stocks and generating income for the Fund. For the 12 months ended July 31, 2014, gross of fees, the note- and bond-only portion of the Fund’s portfolio returned 1.81%, somewhat below the Bank of America Merrill Lynch 1 – 10 Year U.S. Corporate Government Index return of 2.53%. In addition, the Fund held considerable cash reserves for precautionary purposes (7.8% of assets as of July 31, 2014), which generated a return of 0.00% for the twelve months. Slightly weaker fixed income returns came from yield curve positioning. The Fund’s fixed income holdings were conservatively positioned, with short maturity and duration positions.
The Fund’s portfolio managers do not anticipate any significant changes in investment strategy for the Fund, believing that the investment environment may be favorable to the Fund’s core holdings in what the portfolio managers consider high-quality, environmentally responsible companies with strong growth prospects and reasonable valuations. In addition, the Fund’s portfolio managers anticipate that the U.S. will experience a rising interest-rate environment for at least the next twelve months, but that short-term interest rates are likely to rise more than intermediate-term interest rates. In response, the Fund’s portfolio managers have slightly lengthened the average maturity and duration of the portfolio, but do not anticipate extending further at this time.
The S&P 500® Index and the S&P Supercomposite 1500 Index (the S&P 1500 Index) are unmanaged indexes of 500 and 1500 stocks, respectively. 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 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. Similar to the Balanced Fund, the performance of the S&P 500® Index and the S&P 1500 Index, the Custom Balanced Index and the BofA Merrill Lynch Index reflect reinvestment of dividends and distributions. Unlike the Fund, however, the performance of the S&P 500® Index, the S&P 1500 Index, the Custom Balanced Index and the BofA Merrilly Lynch Index does not include management and other operating expenses. It is not possible to invest directly in an index.
The Lipper Balanced Fund Index includes the 30 largest funds whose primary objective is to conserve principal by maintaining at all times a balanced portfolio of both stocks and bonds. Typically the stock/bond ratio ranges around 60%/40%.
7
The Balanced Fund consistently includes stocks and bonds of what Green Century believes to be 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 the 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 Funds’ environmental criteria limit the investments available to the Funds compared to mutual funds that do not use environmental criteria.
8
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE (unaudited)
GREEN CENTURY EQUITY FUND
Investment Objective The Green Century Equity Fund (the Equity Fund or the Fund) seeks to achieve long-term total return that matches the performance of an index comprised of the stocks of companies selected based on environmental, social and governance criteria.
Portfolio Orientation The Fund seeks to achieve its objective by investing in the 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 KLD400 Social Index (the KLD400 Index), minus the stocks of the companies that explore, extract, process, refine or distribute coal, oil or gas that are included in the KLD400 Index. The KLD400 Index, formerly named the Domini 400 Social Index, is the longest-running socially responsible index. Like other index funds, the Equity Fund is not actively managed in the traditional investment sense, but rather seeks to be nearly fully invested at all times in a broad and diverse portfolio of stocks which meet certain environmental, social and governance criteria. The Equity Fund, like many 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 Funds’ environmental criteria limit the investments available to the Funds compared to mutual funds that do not use environmental criteria.
In evaluating whether a company meets the criteria for inclusion in the Index, a company’s dedication to sustainability is analyzed across five key categories: environment; community and society; employees and supply chain; customers; and governance and ethics. Green Century believes that certain industries impose unique and onerous risks and/or costs on society. Companies involved in these industries are evaluated based on their level of involvement as well as the impact of that involvement on society. Therefore, companies that
GREEN CENTURY EQUITY FUND
INVESTMENT BY INDUSTRY (unaudited)
9
derive significant revenues from the manufacture of tobacco products or alcoholic beverages; derive significant revenues from the operation of gambling enterprises; or have a significant direct ownership share in, operate or design nuclear power plants are not eligible for the Index. Major military contractors and firearms manufacturers are also ineligible. The Index excludes all companies that explore, extract, process, refine or distribute coal, oil or gas.
Investment Strategy and Performance Green Century believes that companies that minimize their negative social and environmental impact and follow governance standards could enjoy competitive advantages and be less likely to incur certain legal liabilities that may be assessed when a product or service is determined to be harmful. Green Century also believes that such investments may, over the long term, provide investors with a return that is competitive with enterprises that do not exhibit such social and environmental awareness.
The Equity Fund’s total return for its fiscal year ended July 31, 2014 was 15.16%, while the S&P 500® Index2 returned 16.94% for the same period. Additional results for various time periods are below*:
Green Century Equity Fund Total expense ratio: 1.25% | AVERAGE ANNUAL RETURN* | |||||||||||||||||
One Year | Three Years | Five Years | Ten Years | |||||||||||||||
June 30, 2014 | Green Century Equity Fund | 21.10% | 15.02% | 17.02% | 6.19% | |||||||||||||
S&P 500® Index2 | 24.61% | 16.58% | 18.83% | 7.78% | ||||||||||||||
July 31, 2014 | Green Century Equity Fund | 15.16% | 15.57% | 14.97% | 6.53% | |||||||||||||
S&P 500® Index | 16.94% | 16.84% | 16.79% | 8.00% |
* 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 Fund prices and performance information as of the most recent month-end, call 1-800-93-GREEN/1-800-934-7336. Performance includes the reinvestment of income dividends and capital gains 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.
The Equity Fund performed slightly below the S&P 500® Index, underperforming by less than two percent. Since the MSCI KLD 400 Social ex Fossil Fuels Index does not include all of the stocks in the S&P 500® Index and includes some stocks not included in the S&P 500® Index, the performance of the Fund can be expected to differ from the performance of the broader benchmark. The performance of the Fund, relative to the S&P 500® Index, was boosted by the positive impact of stock selection in the Health Care, Financials, and
The S&P 500® Index is an unmanaged index of 500 stocks. Similar to the Equity Fund, the S&P 500® Index’s performance reflects reinvestment of dividends and distributions. Unlike the Fund, however, the S&P 500® Index’s performance does not include management and other operating expenses.
10
Telecommunication Services sectors. The relative performance of the Fund was negatively impacted by stock selection in the Information Technology, Consumer Staples, and Materials sectors.
The strongest performing sectors in the Equity Fund were Telecommunication Services, Health Care, and Information Technology, which returned 33.14%, 24.02%, and 20.95%, respectively. No sector posted negative returns, though Consumer Staples, Utilities, and Consumer Discretionary exhibited the worst returns for the year. Within the S&P 500® Index, Information Technology, Materials, and Health Care were the strongest performing sectors, gaining 28.13%, 23.12%, and 21.42%, respectively. No sector returns were negative, and the worst performing sectors were Consumer Staples, Telecommunication Services, and Utilities.
1 As of July 31, 2014, the following companies comprised the listed percentages of each of the Green Century Funds:
Portfolio Holdings | GREEN CENTURY BALANCED FUND | GREEN CENTURY EQUITY FUND | ||||||
Kellogg Company | 0.00 | % | 0.24 | % | ||||
General Mills, Inc. | 0.01 | % | 0.47 | % | ||||
The JM Smucker Company | 1.17 | % | 0.15 | % | ||||
ConAgra | 0.00 | % | 0.00 | % | ||||
Sealed Air Corporation | 1.29 | % | 0.10 | % | ||||
Wabtec Corporation | 0.81 | % | 0.11 | % | ||||
ABB Limited ADR | 1.50 | % | 0.00 | % | ||||
African Development Bank | 0.82 | % | 0.00 | % | ||||
Bank of America Corporation | 0.82 | % | 0.00 | % | ||||
Export-Import Bank of Korea | 0.81 | % | 0.00 | % | ||||
International Finance Corporation | 0.82 | % | 0.00 | % | ||||
International Bank for Reconstruction and Development | 1.24 | % | 0.00 | % | ||||
Regency Centers LP | 0.61 | % | 0.00 | % | ||||
Vornado Realty LP | 0.61 | % | 0.00 | % | ||||
Overseas Private Investment Corporation | 0.41 | % | 0.00 | % | ||||
Shire PLC ADR | 2.31 | % | 0.00 | % | ||||
NXP Semiconductors | 1.03 | % | 0.00 | % | ||||
SanDisk Corporation | 0.40 | % | 0.00 | % | ||||
Gilead Sciences, Inc. | 0.84 | % | 2.09 | % | ||||
Canadian Pacific Railway Ltd. | 0.40 | % | 0.00 | % | ||||
Whole Foods Market, Inc. | 0.92 | % | 0.21 | % | ||||
Interface, Inc. | 0.45 | % | 0.02 | % | ||||
Symantec Corporation | 0.63 | % | 0.24 | % | ||||
Panera Bread Company | 0.70 | % | 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. Note that some of the holdings discussed above may not have been held by either Fund during the fiscal year ended July 31, 2014, or may have been held by a Fund for a portion of the fiscal year or may have been held by a Fund for the entire fiscal year. 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.
2 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. 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 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 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 S&P 500® Index, the S&P Supercomposite 1500 Index or the Custom Balanced Index or the BofA Merrill Lynch Index. Lipper Analytical Services, Inc. (“Lipper”) is a respected mutual fund reporting service. The Lipper Balanced Fund Index includes the 30 largest funds whose primary objective is to conserve principal by maintaining at all times a balanced portfolio of both stocks and bonds. Typically the stock/bond ratio ranges around 60%/40%.
This material must be preceded or accompanied by a current prospectus.
Distributor: UMB Distribution Services, LLC 9/14
11
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.
12
GREEN CENTURY FUNDS EXPENSE EXAMPLE
For the six months ended July 31, 2014 (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 February 1, 2014 to July 31, 2014 (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 FEBRUARY 1, 2014 | ENDING ACCOUNT VALUE JULY 31, 2014 | EXPENSES PAID DURING THE PERIOD1 | ||||||||||
Balanced Fund | ||||||||||||
Actual Expenses | $ | 1,000.00 | $ | 1,048.00 | $ | 7.52 | ||||||
Hypothetical Example, assuming a 5% return before expenses | 1,000.00 | 1,017.66 | 7.41 | |||||||||
Equity Fund | ||||||||||||
Actual Expenses | 1,000.00 | 1,078.20 | 6.44 | |||||||||
Hypothetical Example, assuming a 5% return before expenses | 1,000.00 | 1,018.80 | 6.26 |
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 181/365 (to reflect the one-half year period).
13
GREEN CENTURY BALANCED FUND PORTFOLIO OF INVESTMENTS
July 31, 2014
COMMON STOCKS — 66.5% | ||||||||
SHARES | VALUE | |||||||
Technology Hardware & Equipment — 7.4% |
| |||||||
Apple, Inc. | 30,716 | $ | 2,935,528 | |||||
Cisco Systems, Inc. | 83,524 | 2,107,311 | ||||||
F5 Networks, Inc. (a) | 6,829 | 768,877 | ||||||
Palo Alto Networks, Inc. (a) | 5,662 | 457,829 | ||||||
QUALCOMM, Inc. | 31,102 | 2,292,218 | ||||||
SanDisk Corporation | 5,351 | 490,740 | ||||||
9,052,503 | ||||||||
Capital Goods — 6.8% |
| |||||||
ABB Ltd. American Depositary Receipt (a)(b) | 79,659 | 1,832,157 | ||||||
Eaton Corporation PLC (b) | 15,177 | 1,030,822 | ||||||
Lincoln Electric Holdings, Inc. | 24,209 | 1,608,446 | ||||||
Middleby Corporation (The) (a) | 6,045 | 440,439 | ||||||
Pentair PLC | 8,937 | 572,593 | ||||||
Valmont Industries, Inc. | 9,052 | 1,318,243 | ||||||
W.W. Grainger, Inc. | 2,176 | 511,686 | ||||||
Wabtec Corporation | 12,298 | 992,203 | ||||||
8,306,589 | ||||||||
Pharmaceuticals & Biotechnology — 6.5% |
| |||||||
Amgen, Inc. | 10,456 | 1,331,990 | ||||||
Gilead Sciences, Inc. (a) | 11,207 | 1,026,001 | ||||||
GlaxoSmithKline PLC American Depositary Receipt (b) | 31,085 | 1,503,581 | ||||||
Novartis A.G. American Depositary Receipt (b) | 13,937 | 1,211,683 | ||||||
Shire PLC American Depositary Receipt (b) | 11,428 | 2,817,002 | ||||||
7,890,257 | ||||||||
Banks — 5.4% |
| |||||||
East West Bancorp, Inc. | 23,205 | 790,362 | ||||||
Fifth Third Bancorp | 59,794 | 1,224,581 | ||||||
First Republic Bank | 12,079 | 564,331 | ||||||
JPMorgan Chase & Company | 15,051 | 867,991 | ||||||
Umpqua Holdings Corporation | 107,099 | 1,812,115 | ||||||
Wells Fargo & Company | 26,213 | 1,334,242 | ||||||
6,593,622 | ||||||||
Software & Services — 4.8% |
| |||||||
Citrix Systems, Inc. (a) | 5,269 | 356,869 | ||||||
eBay, Inc. (a) | 10,068 | 531,591 | ||||||
Google, Inc., Class A (a) | 1,195 | 692,562 | ||||||
Google, Inc., Class C (a) | 1,195 | 683,062 | ||||||
Software & Services — (continued) |
| |||||||
International Business Machines Corporation | 103 | 19,742 | ||||||
MasterCard, Inc., Class A | 20,180 | 1,496,347 | ||||||
Microsoft Corporation | 48,530 | 2,094,555 | ||||||
5,874,728 | ||||||||
Healthcare Equipment & Services — 4.7% |
| |||||||
Baxter International, Inc. | 19,756 | 1,475,576 | ||||||
Hologic, Inc. (a) | 27,988 | 729,647 | ||||||
Omnicell, Inc. (a) | 34,317 | 940,286 | ||||||
UnitedHealth Group, Inc. | 21,130 | 1,712,586 | ||||||
Zimmer Holdings, Inc. | 8,952 | 895,827 | ||||||
5,753,922 | ||||||||
Diversified Financials — 4.6% |
| |||||||
American Express Company | 4,365 | 384,120 | ||||||
Charles Schwab Corporation (The) | 59,641 | 1,655,038 | ||||||
Citigroup, Inc. | 14,937 | 730,569 | ||||||
Stifel Financial Corporation (a) | 45,527 | 2,084,681 | ||||||
T. Rowe Price Group, Inc. | 10,370 | 805,334 | ||||||
5,659,742 | ||||||||
Insurance — 4.0% |
| |||||||
Aflac, Inc. | 26,068 | 1,557,302 | ||||||
Horace Mann Educators Corporation | 45,430 | 1,301,570 | ||||||
Lincoln National Corporation | 9,136 | 478,635 | ||||||
Reinsurance Group of America, Inc. | 18,685 | 1,499,658 | ||||||
4,837,165 | ||||||||
Food & Beverage — 2.9% |
| |||||||
General Mills, Inc. | 300 | 15,045 | ||||||
JM Smucker Company (The) | 14,257 | 1,420,567 | ||||||
Keurig Green Mountain, Inc. | 6,509 | 776,394 | ||||||
Unilever NV American Depositary Receipt (b) | 31,749 | 1,305,836 | ||||||
3,517,842 | ||||||||
Renewable Energy & Energy Efficiency — 2.7% |
| |||||||
First Solar, Inc. (a) | 14,364 | 906,512 | ||||||
Johnson Controls, Inc. | 42,904 | 2,026,785 | ||||||
Ormat Technologies, Inc. | 14,579 | 375,992 | ||||||
3,309,289 | ||||||||
14
GREEN CENTURY BALANCED FUND PORTFOLIO OF INVESTMENTS
July 31, 2014continued
SHARES | VALUE | |||||||
Semiconductors — 2.5% |
| |||||||
Applied Materials, Inc. | 27,383 | $ | 573,948 | |||||
ARM Holdings PLC American Depositary Receipt (b) | 7,722 | 330,193 | ||||||
Intel Corporation | 15,114 | 512,213 | ||||||
NXP Semiconductors NV (a)(b) | 20,229 | 1,261,278 | ||||||
Xilinx, Inc. | 9,641 | 396,534 | ||||||
3,074,166 | ||||||||
Retailing — 2.1% |
| |||||||
Home Depot, Inc. (The) | 10,868 | 878,677 | ||||||
Priceline Group, Inc. (The) (a) | 364 | 452,252 | ||||||
TJX Companies, Inc. (The) | 23,348 | 1,244,215 | ||||||
2,575,144 | ||||||||
Materials — 2.0% |
| |||||||
Owens-Illinois, Inc. (a) | 26,431 | 824,383 | ||||||
Sealed Air Corporation | 48,847 | 1,568,966 | ||||||
2,393,349 | ||||||||
Transportation — 1.6% |
| |||||||
Canadian Pacific Railway Ltd. | 2,569 | 487,981 | ||||||
United Parcel Service, Inc., Class B | 14,699 | 1,427,126 | ||||||
1,915,107 | ||||||||
Consumer Durables & Apparel — 1.6% |
| |||||||
Deckers Outdoor Corporation (a) | 10,889 | 963,785 | ||||||
Jarden Corporation (a) | 16,806 | 939,456 | ||||||
1,903,241 | ||||||||
Healthy Living — 1.4% |
| |||||||
United Natural Foods, Inc. (a) | 9,972 | 584,559 | ||||||
Whole Foods Market, Inc. | 29,412 | 1,124,126 | ||||||
1,708,685 | ||||||||
Consumer Services — 1.2% |
| |||||||
Panera Bread Company, Class A (a) | 5,805 | 855,076 | ||||||
Starbucks Corporation | 275 | 21,362 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 7,632 | 586,443 | ||||||
1,462,881 | ||||||||
Telecommunication Services — 1.2% |
| |||||||
BT Group PLC American Depositary Receipt (b) | 12,148 | 795,937 | ||||||
SBA Communications Corporation, Class A (a) | 6,029 | 644,681 | ||||||
1,440,618 | ||||||||
Media — 1.1% |
| |||||||
Discovery Communications, Inc., Class A (a) | 6,554 | 558,467 | ||||||
Imax Corporation (a) | 31,470 | 827,346 | ||||||
1,385,813 | ||||||||
Automobiles & Components — 0.7% |
| |||||||
BorgWarner, Inc. | 13,952 | 868,512 | ||||||
Food & Staples Retailing — 0.6% |
| |||||||
Costco Wholesale Corporation | 5,952 | 699,598 | ||||||
Commercial & Professional Services — 0.4% |
| |||||||
Interface, Inc. | 34,302 | 543,687 | ||||||
Household & Personal Products — 0.3% |
| |||||||
Church & Dwight Company, Inc. | 5,304 | 340,411 | ||||||
Total Common Stocks | 81,106,871 | |||||||
BONDS & NOTES — 25.1% | ||||||||
PRINCIPAL AMOUNT | VALUE | |||||||
Green Bonds, Renewable Energy & Energy Efficiency — 6.2% |
| |||||||
African Development Bank | $ | 1,000,000 | $ | 1,004,540 | ||||
Bank of America Corporation | 1,000,000 | 1,003,308 | ||||||
Export-Import Bank of Korea | 1,000,000 | 990,691 | ||||||
International Bank for Reconstruction & Development | 1,000,000 | 1,002,023 | ||||||
International Bank for Reconstruction & Development | 500,000 | 514,445 | ||||||
International Finance Corporation | 1,000,000 | 997,006 | ||||||
Johnson Controls, Inc. | 500,000 | 533,731 | ||||||
Regency Centers LP | 750,000 | 748,581 | ||||||
Vornado Realty LP | 750,000 | 749,414 | ||||||
7,543,739 | ||||||||
15
GREEN CENTURY BALANCED FUND PORTFOLIO OF INVESTMENTS
July 31, 2014continued
PRINCIPAL AMOUNT | VALUE | |||||||
U.S. Government Agencies — 5.5% |
| |||||||
Federal Farm Credit Bank | $ | 500,000 | $ | 546,308 | ||||
Federal Farm Credit Bank | 1,000,000 | 999,399 | ||||||
Federal Farm Credit Bank | 1,000,000 | 942,445 | ||||||
Federal Home Loan Bank | 1,000,000 | 1,095,389 | ||||||
Federal Home Loan Bank | 550,000 | 601,516 | ||||||
Federal Home Loan Bank | 1,000,000 | 977,372 | ||||||
Federal Home Loan Mortgage Corporation | 500,000 | 500,487 | ||||||
Federal Home Loan Mortgage Corporation | 500,000 | 544,970 | ||||||
Overseas Private Investment Corporation | 250,000 | 248,501 | ||||||
Overseas Private Investment Corporation | 250,000 | 253,894 | ||||||
6,710,281 | ||||||||
Software & Services — 2.9% |
| |||||||
International Business Machines Corporation | 500,000 | 510,693 | ||||||
International Business Machines Corporation | 500,000 | 649,181 | ||||||
Microsoft Corporation | 500,000 | 507,738 | ||||||
Oracle Corporation | 500,000 | 497,519 | ||||||
Oracle Corporation | 500,000 | 564,462 | ||||||
Symantec Corporation | 750,000 | 771,081 | ||||||
3,500,674 | ||||||||
Banks — 2.2% |
| |||||||
HSBC Bank USA N.A. | 500,000 | 561,294 | ||||||
Banks — (continued) |
| |||||||
HSBC Holdings PLC | 750,000 | 850,261 | ||||||
JPMorgan Chase & Company | 500,000 | 502,588 | ||||||
JPMorgan Chase & Company | 750,000 | 813,699 | ||||||
2,727,842 | ||||||||
Diversified Financials — 2.1% |
| |||||||
Bank of New York Mellon Corporation (The) | 1,000,000 | 1,046,066 | ||||||
Citigroup, Inc. | 500,000 | 526,647 | ||||||
Deutsche Bank A.G. | 500,000 | 517,544 | ||||||
Morgan Stanley | 500,000 | 523,964 | ||||||
2,614,221 | ||||||||
Pharmaceuticals & Biotechnology — 1.5% |
| |||||||
Amgen, Inc. | 500,000 | 506,619 | ||||||
Amgen, Inc. | 750,000 | 858,971 | ||||||
Thermo Fisher Scientific, Inc. | 500,000 | 502,194 | ||||||
1,867,784 | ||||||||
Telecommunication Services — 1.5% |
| |||||||
America Movil SAB de C.V. | 750,000 | 837,765 | ||||||
AT&T, Inc. | 333,000 | 339,631 | ||||||
Verizon Communications, Inc. | 500,000 | 587,534 | ||||||
1,764,930 | ||||||||
Technology Hardware & Equipment — 0.8% |
| |||||||
Dell, Inc. | 500,000 | 501,500 | ||||||
EMC Corporation | 500,000 | 499,691 | ||||||
1,001,191 | ||||||||
16
GREEN CENTURY BALANCED FUND PORTFOLIO OF INVESTMENTS
July 31, 2014concluded
PRINCIPAL AMOUNT | VALUE | |||||||
Healthcare Equipment & Services — 0.8% |
| |||||||
Baxter International, Inc. | $ | 500,000 | $ | 501,267 | ||||
Stryker Corporation | 500,000 | 491,948 | ||||||
993,215 | ||||||||
Capital Goods — 0.7% |
| |||||||
Koninklijke Philips NV | 750,000 | 853,886 | ||||||
Media — 0.5% |
| |||||||
Discovery Communications LLC | 500,000 | 568,203 | ||||||
Food & Staples Retailing — 0.4% |
| |||||||
CVS Caremark Corporation | 500,000 | 504,524 | ||||||
Total Bonds & Notes | 30,650,490 | |||||||
CERTIFICATES OF DEPOSIT — 0.1% |
| |||||||
Self Help Credit Union Environmental Certificate of Deposit | 95,000 | 95,000 | ||||||
Total Certificates Of Deposit | 95,000 | |||||||
SHORT-TERM OBLIGATION — 7.8% | ||||||||
Repurchase Agreement — | 9,502,128 | |||||||
TOTAL INVESTMENTS (d) — 99.5% |
| |||||||
(Cost $103,383,204) | 121,354,489 | |||||||
Other Assets Less Liabilities — 0.5% | 552,394 | |||||||
NET ASSETS — 100.0% | $ | 121,906,883 | ||||||
(a) | Non-income producing security. |
(b) | Securities whose values are determined or significantly influenced by trading in markets other than the United States or Canada. |
(c) | Step rate bond. Rate shown is currently in effect at July 31, 2014. |
(d) | The cost of investments for federal income tax purposes is $103,380,571 resulting in gross unrealized appreciation and depreciation of $19,032,598 and $1,058,680 respectively, or net unrealized appreciation of $17,973,918. |
See Notes to Financial Statements
17
GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS
July 31, 2014
COMMON STOCKS — 99.0% | ||||||||
SHARES | VALUE | |||||||
Software & Services — 14.0% |
| |||||||
Accenture PLC, Class A | 9,019 | $ | 715,026 | |||||
Adobe Systems, Inc. (a) | 6,709 | 463,659 | ||||||
Advent Software, Inc. | 558 | 18,113 | ||||||
Autodesk, Inc. (a) | 3,191 | 170,240 | ||||||
CA, Inc. | 4,755 | 137,324 | ||||||
Cognizant Technology Solutions Corporation, Class A (a) | 8,582 | 420,947 | ||||||
Compuware Corporation | 3,116 | 28,356 | ||||||
Convergys Corporation | 1,397 | 27,088 | ||||||
FactSet Research Systems, Inc. | 589 | 70,757 | ||||||
FleetCor Technologies, Inc. (a) | 1,056 | 140,226 | ||||||
Google, Inc., Class A (a) | 3,977 | 2,304,870 | ||||||
Google, Inc., Class C (a) | 4,052 | 2,316,123 | ||||||
International Business Machines Corporation | 14,010 | 2,685,297 | ||||||
Intuit, Inc. | 3,818 | 312,961 | ||||||
NetSuite, Inc. (a) | 515 | 43,420 | ||||||
Oracle Corporation | 50,945 | 2,057,668 | ||||||
Salesforce.com, Inc. (a) | 8,094 | 439,099 | ||||||
Symantec Corporation | 9,760 | 230,922 | ||||||
Teradata Corporation (a) | 2,256 | 95,113 | ||||||
Xerox Corporation | 15,937 | 211,325 | ||||||
Yahoo!, Inc. (a) | 13,590 | 486,658 | ||||||
13,375,192 | ||||||||
Pharmaceuticals & Biotechnology — 10.4% |
| |||||||
Affymetrix, Inc. (a) | 991 | 8,523 | ||||||
Agilent Technologies, Inc. | 4,739 | 265,810 | ||||||
Amgen, Inc. | 10,687 | 1,361,417 | ||||||
Biogen Idec, Inc. (a) | 3,345 | 1,118,534 | ||||||
Bristol-Myers Squibb Company | 23,367 | 1,182,837 | ||||||
Cepheid, Inc. (a) | 1,042 | 39,221 | ||||||
Fluidigm Corporation (a) | 349 | 9,992 | ||||||
Gilead Sciences, Inc. (a) | 21,782 | 1,994,142 | ||||||
Merck & Company, Inc. | 41,643 | 2,362,824 | ||||||
Mettler-Toledo International, Inc. (a) | 416 | 106,970 | ||||||
PAREXEL International Corporation (a) | 807 | 43,223 | ||||||
Techne Corporation | 550 | 51,326 | ||||||
Thermo Fisher Scientific, Inc. | 5,538 | 672,867 | ||||||
Vertex Pharmaceuticals, Inc. (a) | 3,337 | 296,693 | ||||||
VIVUS, Inc. (a) | 1,168 | 5,630 | ||||||
Waters Corporation (a) | 1,213 | 125,473 | ||||||
Pharmaceuticals & Biotechnology — (continued) |
| |||||||
Zoetis, Inc. | 7,097 | 233,562 | ||||||
9,879,044 | ||||||||
Technology Hardware & Equipment — 6.5% |
| |||||||
Black Box Corporation | 196 | 4,057 | ||||||
Calix, Inc. (a) | 430 | 3,995 | ||||||
Cisco Systems, Inc. | 72,949 | 1,840,503 | ||||||
Corning, Inc. | 19,751 | 388,107 | ||||||
Digi International, Inc. (a) | 323 | 2,668 | ||||||
EMC Corporation | 28,702 | 840,968 | ||||||
Flextronics International Ltd. (a) | 8,538 | 88,710 | ||||||
Hewlett-Packard Company | 26,939 | 959,298 | ||||||
Kemet Corporation (a) | 559 | 2,756 | ||||||
Lexmark International, Inc. | 832 | 39,961 | ||||||
Motorola Solutions, Inc. | 3,225 | 205,368 | ||||||
Oplink Communications, Inc. (a) | 231 | 4,403 | ||||||
Plantronics, Inc. | 611 | 28,699 | ||||||
Polycom, Inc. (a) | 2,000 | 25,640 | ||||||
QUALCOMM, Inc. | 23,951 | 1,765,189 | ||||||
Silicon Graphics International Corporation (a) | 443 | 4,213 | ||||||
Super Micro Computer, Inc. (a) | 474 | 12,404 | ||||||
6,216,939 | ||||||||
Capital Goods — 6.5% |
| |||||||
3M Company | 8,919 | 1,256,598 | ||||||
A.O. Smith Corporation | 1,101 | 51,417 | ||||||
AECOM Technology Corporation (a) | 1,254 | 42,573 | ||||||
AGCO Corporation | 1,287 | 62,690 | ||||||
Air Lease Corporation | 1,427 | 49,160 | ||||||
American Science & Engineering, Inc. | 117 | 7,348 | ||||||
Applied Industrial Technologies, Inc. | 566 | 27,428 | ||||||
Builders FirstSource, Inc. (a) | 589 | 3,499 | ||||||
Caterpillar, Inc. | 9,029 | 909,672 | ||||||
CLARCOR, Inc. | 721 | 42,762 | ||||||
Cummins, Inc. | 2,506 | 349,311 | ||||||
Deere & Company | 4,967 | 422,741 | ||||||
Dover Corporation | 2,405 | 206,253 | ||||||
EMCOR Group, Inc. | 952 | 38,965 | ||||||
Fastenal Company | 3,993 | 177,090 | ||||||
Graco, Inc. | 884 | 65,549 | ||||||
Granite Construction, Inc. | 512 | 16,666 | ||||||
H&E Equipment Services, Inc. (a) | 455 | 16,462 |
18
GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS
July 31, 2014continued
SHARES | VALUE | |||||||
Capital Goods — (continued) |
| |||||||
Illinois Tool Works, Inc. | 5,697 | $ | 469,262 | |||||
Ingersoll-Rand PLC | 3,938 | 231,515 | ||||||
Lincoln Electric Holdings, Inc. | 1,106 | 73,483 | ||||||
Masco Corporation | 5,019 | 104,395 | ||||||
Meritor, Inc. (a) | 1,255 | 15,775 | ||||||
Middleby Corporation (The) (a) | 820 | 59,745 | ||||||
Nordson Corporation | 882 | 66,300 | ||||||
Owens Corning | 1,552 | 52,846 | ||||||
Pall Corporation | 1,560 | 120,853 | ||||||
Parker Hannifin Corporation | 2,104 | 241,855 | ||||||
Rockwell Automation, Inc. | 1,967 | 219,635 | ||||||
Snap-on, Inc. | 824 | 99,045 | ||||||
Tennant Company | 238 | 17,362 | ||||||
Timken Company (The) | 1,073 | 47,534 | ||||||
United Rentals, Inc. (a) | 1,366 | 144,659 | ||||||
W.W. Grainger, Inc. | 871 | 204,816 | ||||||
WABCO Holdings, Inc. (a) | 829 | 80,811 | ||||||
Wabtec Corporation | 1,355 | 109,321 | ||||||
Xylem, Inc. | 2,614 | 92,248 | ||||||
6,197,644 | ||||||||
Diversified Financials — 5.8% | ||||||||
American Express Company | 13,548 | 1,192,224 | ||||||
Ameriprise Financial, Inc. | 2,705 | 323,518 | ||||||
Bank of New York Mellon Corporation (The) | 16,060 | 626,983 | ||||||
BlackRock, Inc. | 1,896 | 577,768 | ||||||
Charles Schwab Corporation (The) | 16,571 | 459,845 | ||||||
CME Group, Inc. | 4,527 | 334,726 | ||||||
Franklin Resources, Inc. | 5,808 | 314,503 | ||||||
Intercontinental Exchange, Inc. | 1,630 | 313,319 | ||||||
Invesco Ltd. | 6,135 | 230,860 | ||||||
Legg Mason, Inc. | 1,536 | 72,883 | ||||||
Northern Trust Corporation | 3,145 | 210,369 | ||||||
PHH Corporation (a) | 728 | 16,999 | ||||||
State Street Corporation | 6,118 | 430,952 | ||||||
T. Rowe Price Group, Inc. | 3,712 | 288,274 | ||||||
TD Ameritrade Holding Corporation | 3,927 | 126,135 | ||||||
5,519,358 | ||||||||
Food & Beverage — 5.2% |
| |||||||
Bunge Ltd. | 2,114 | 166,668 | ||||||
Campbell Soup Company | 2,912 | 121,110 | ||||||
Coca-Cola Enterprises, Inc. | 3,425 | 155,666 | ||||||
Darling Ingredients, Inc. (a) | 2,325 | 43,524 | ||||||
General Mills, Inc. | 8,846 | 443,627 | ||||||
Food & Beverage — (continued) |
| |||||||
Hillshire Brands Company (The) | 1,728 | 108,467 | ||||||
JM Smucker Company (The) | 1,466 | 146,072 | ||||||
Kellogg Company | 3,811 | 228,012 | ||||||
Keurig Green Mountain, Inc. | 1,756 | 209,456 | ||||||
Kraft Foods Group, Inc. | 8,450 | 452,793 | ||||||
McCormick & Company, Inc. | 1,673 | 110,050 | ||||||
Mondelez International, Inc., Class A | 24,052 | 865,872 | ||||||
PepsiCo, Inc. | 21,559 | 1,899,348 | ||||||
4,950,665 | ||||||||
Household & Personal Products — 5.2% |
| |||||||
Avon Products, Inc. | 6,180 | 81,576 | ||||||
Clorox Company (The) | 1,838 | 159,667 | ||||||
Colgate-Palmolive Company | 13,031 | 826,166 | ||||||
Energizer Holdings, Inc. | 885 | 101,563 | ||||||
Estee Lauder Companies, Inc. (The), Class A | 3,374 | 247,854 | ||||||
Kimberly-Clark Corporation | 5,374 | 558,197 | ||||||
Procter & Gamble Company (The) | 38,407 | 2,969,629 | ||||||
4,944,652 | ||||||||
Real Estate — 4.6% |
| |||||||
American Tower Corporation | 5,593 | 527,923 | ||||||
AvalonBay Communities, Inc. | 1,832 | 271,283 | ||||||
Boston Properties, Inc. | 2,161 | 258,131 | ||||||
CBRE Group, Inc., Class A (a) | 4,202 | 129,590 | ||||||
Corporate Office Properties Trust | 1,246 | 35,349 | ||||||
Digital Realty Trust, Inc. | 1,814 | 116,803 | ||||||
Duke Realty Corporation | 4,681 | 84,211 | ||||||
Equity Residential | 4,854 | 313,811 | ||||||
Federal Realty Investment Trust | 941 | 114,896 | ||||||
Forest City Enterprises, Inc., Class A (a) | 2,162 | 41,446 | ||||||
HCP, Inc. | 6,513 | 270,485 | ||||||
Host Hotels & Resorts, Inc. | 10,723 | 233,118 | ||||||
Jones Lang LaSalle, Inc. | 637 | 78,797 | ||||||
Liberty Property Trust | 2,111 | 74,244 | ||||||
Macerich Company (The) | 1,998 | 129,890 | ||||||
Plum Creek Timber Company, Inc. | 2,495 | 103,218 | ||||||
Potlatch Corporation | 545 | 22,508 | ||||||
Prologis, Inc. | 7,102 | 289,833 | ||||||
Simon Property Group, Inc. | 4,446 | 747,773 | ||||||
UDR, Inc. | 3,563 | 103,612 | ||||||
Vornado Realty Trust | 2,387 | 253,070 | ||||||
Weyerhaeuser Company | 7,437 | 232,927 | ||||||
4,432,918 | ||||||||
19
GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS
July 31, 2014continued
SHARES | VALUE | |||||||
Semiconductors — 4.2% |
| |||||||
Advanced Micro Devices, Inc. (a) | 8,866 | $ | 34,666 | |||||
Analog Devices, Inc. | 4,430 | 219,861 | ||||||
Applied Materials, Inc. | 17,108 | 358,584 | ||||||
Intel Corporation | 70,415 | 2,386,364 | ||||||
Lam Research Corporation | 2,297 | 160,790 | ||||||
Microchip Technology, Inc. | 2,820 | 126,956 | ||||||
Texas Instruments, Inc. | 15,352 | 710,030 | ||||||
3,997,251 | ||||||||
Healthcare Equipment & Services — 3.8% |
| |||||||
AmerisourceBergen Corporation | 3,248 | 249,804 | ||||||
Becton, Dickinson and Company | 2,745 | 319,079 | ||||||
Brookdale Senior Living, Inc. (a) | 530 | 18,368 | ||||||
Cardinal Health, Inc. | 4,854 | 347,789 | ||||||
Cerner Corporation (a) | 4,388 | 242,218 | ||||||
Cigna Corporation | 3,869 | 348,365 | ||||||
DENTSPLY International, Inc. | 2,012 | 93,397 | ||||||
Edwards Lifesciences Corporation (a) | 1,528 | 137,902 | ||||||
Henry Schein, Inc. (a) | 1,197 | 139,151 | ||||||
Hologic, Inc. (a) | 3,148 | 82,068 | ||||||
Humana, Inc. | 2,181 | 256,595 | ||||||
IDEXX Laboratories, Inc. (a) | 731 | 90,995 | ||||||
Laboratory Corporation of America Holdings (a) | 1,198 | 124,221 | ||||||
Medtronic, Inc. | 14,161 | 874,300 | ||||||
Molina Healthcare, Inc. (a) | 404 | 16,503 | ||||||
MWI Veterinary Supply, Inc. (a) | 202 | 28,534 | ||||||
Patterson Companies, Inc. | 1,193 | 46,539 | ||||||
Select Medical Holdings Corporation | 1,232 | 19,145 | ||||||
Team Health Holdings, Inc. (a) | 1,041 | 58,869 | ||||||
Varian Medical Systems, Inc. (a) | 1,454 | 119,446 | ||||||
3,613,288 | ||||||||
Telecommunication Services — 3.6% |
| |||||||
CenturyLink, Inc. | 8,188 | 321,297 | ||||||
Cincinnati Bell, Inc. (a) | 2,820 | 10,744 | ||||||
Level 3 Communications, Inc. (a) | 2,490 | 109,510 | ||||||
Sprint Corporation (a) | 11,167 | 82,078 | ||||||
Verizon Communications, Inc. | 58,653 | 2,957,284 | ||||||
3,480,913 | ||||||||
Retailing — 3.5% | ||||||||
ANN, Inc. (a) | 672 | 24,696 | ||||||
Bed Bath & Beyond, Inc. (a) | 3,030 | 191,769 | ||||||
Retailing — (continued) | ||||||||
Best Buy Company, Inc. | 4,131 | 122,815 | ||||||
Blue Nile, Inc. (a) | 189 | 4,867 | ||||||
Brown Shoe Company, Inc. | 555 | 15,646 | ||||||
Buckle, Inc. (The) | 392 | 17,444 | ||||||
CarMax, Inc. (a) | 3,157 | 154,093 | ||||||
Foot Locker, Inc. | 2,075 | 98,625 | ||||||
GameStop Corporation, Class A | 1,680 | 70,510 | ||||||
Gap, Inc. (The) | 3,475 | 139,382 | ||||||
Genuine Parts Company | 2,172 | 179,885 | ||||||
HSN, Inc. | 501 | 28,001 | ||||||
Kohl’s Corporation | 3,036 | 162,547 | ||||||
LKQ Corporation (a) | 4,234 | 110,740 | ||||||
Men’s Wearhouse, Inc. (The) | 579 | 29,135 | ||||||
Netflix, Inc. (a) | 804 | 339,867 | ||||||
New York & Company, Inc. (a) | 300 | 1,011 | ||||||
Nordstrom, Inc. | 2,034 | 140,814 | ||||||
Nutrisystem, Inc. | 323 | 5,184 | ||||||
Office Depot, Inc. (a) | 7,224 | 36,192 | ||||||
PetSmart, Inc. | 1,408 | 95,941 | ||||||
Pier 1 Imports, Inc. | 1,334 | 20,090 | ||||||
Pool Corporation | 644 | 35,265 | ||||||
Shutterfly, Inc. (a) | 537 | 26,485 | ||||||
Signet Jewelers Ltd. | 1,072 | 109,119 | ||||||
Staples, Inc. | 9,241 | 107,103 | ||||||
Tiffany & Company | 1,822 | 177,845 | ||||||
TJX Companies, Inc. (The) | 10,061 | 536,151 | ||||||
Tractor Supply Company | 1,951 | 121,294 | ||||||
TripAdvisor, Inc. (a) | 1,660 | 157,434 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. (a) | 873 | 80,604 | ||||||
Vitacost.com, Inc. (a) | 220 | 1,756 | ||||||
Weyco Group, Inc. | 120 | 3,115 | ||||||
3,345,425 | ||||||||
Materials — 3.5% |
| |||||||
Air Products & Chemicals, Inc. | 2,995 | 395,190 | ||||||
Albemarle Corporation | 1,138 | 69,805 | ||||||
Avery Dennison Corporation | 1,389 | 65,575 | ||||||
Ball Corporation | 1,874 | 114,801 | ||||||
Compass Minerals International, Inc. | 474 | 40,773 | ||||||
Domtar Corporation | 894 | 32,112 | ||||||
Eastman Chemical Company | 2,163 | 170,401 | ||||||
Ecolab, Inc. | 3,827 | 415,344 | ||||||
H.B. Fuller Company | 715 | 31,925 | ||||||
International Flavors & Fragrances, Inc. | 1,143 | 115,432 |
20
GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS
July 31, 2014continued
SHARES | VALUE | |||||||
Materials — (continued) |
| |||||||
MeadWestvaco Corporation | 2,460 | $ | 102,828 | |||||
Minerals Technologies, Inc. | 500 | 29,035 | ||||||
Mosaic Company (The) | 4,550 | 209,801 | ||||||
Nucor Corporation | 4,518 | 226,894 | ||||||
Praxair, Inc. | 4,161 | 533,191 | ||||||
Rock-Tenn Company, Class A | 1,011 | 100,524 | ||||||
Schnitzer Steel Industries, Inc., Class A | 354 | 9,455 | ||||||
Sealed Air Corporation | 2,896 | 93,020 | ||||||
Sherwin-Williams Company (The) | 1,206 | 248,713 | ||||||
Sigma-Aldrich Corporation | 1,691 | 169,810 | ||||||
Sonoco Products Company | 1,443 | 56,479 | ||||||
Valspar Corporation (The) | 1,157 | 86,833 | ||||||
Wausau Paper Corporation | 607 | 6,112 | ||||||
3,324,053 | ||||||||
Banks — 3.2% |
| |||||||
Bank of Hawaii Corporation | 601 | 34,365 | ||||||
BB&T Corporation | 10,081 | 373,199 | ||||||
Cathay General Bancorp | 1,037 | 26,537 | ||||||
CIT Group, Inc. | 2,779 | 136,477 | ||||||
Comerica, Inc. | 2,592 | 130,274 | ||||||
Heartland Financial USA, Inc. | 221 | 5,266 | ||||||
International Bancshares Corporation | 818 | 20,736 | ||||||
KeyCorp | 12,683 | 171,728 | ||||||
M&T Bank Corporation | 1,661 | 201,811 | ||||||
New York Community Bancorp, Inc. | 6,253 | 99,298 | ||||||
Old National Bancorp | 1,476 | 19,749 | ||||||
People’s United Financial, Inc. | 4,317 | 62,683 | ||||||
PNC Financial Services Group, Inc. (The) | 7,562 | 624,319 | ||||||
Popular, Inc. (a) | 1,555 | 49,604 | ||||||
U.S. Bancorp | 25,801 | 1,084,416 | ||||||
Umpqua Holdings Corporation | 2,456 | 41,555 | ||||||
3,082,017 | ||||||||
Insurance — 2.9% |
| |||||||
ACE Ltd. | 4,771 | 477,577 | ||||||
Aflac, Inc. | 6,449 | 385,263 | ||||||
Chubb Corporation (The) | 3,472 | 301,057 | ||||||
Hartford Financial Services Group, Inc. | 6,338 | 216,506 | ||||||
Marsh & McLennan Companies, Inc. | 7,764 | 394,178 | ||||||
Insurance — (continued) |
| |||||||
PartnerRe Ltd. | 670 | 69,921 | ||||||
Principal Financial Group, Inc. | 4,178 | 207,563 | ||||||
Progressive Corporation (The) | 8,002 | 187,567 | ||||||
Travelers Companies, Inc. (The) | 4,985 | 446,457 | ||||||
Willis Group Holdings PLC | 2,281 | 92,951 | ||||||
2,779,040 | ||||||||
Media — 2.9% |
| |||||||
Cablevision Systems Corporation, Class A | 2,862 | 55,008 | ||||||
Charter Communications, Inc., Class A (a) | 1,051 | 162,400 | ||||||
Discovery Communications, Inc., Class A (a) | 2,102 | 179,111 | ||||||
Discovery Communications, Inc., Class C (a) | 1,150 | 96,715 | ||||||
DreamWorks Animation SKG, Inc., Class A (a) | 943 | 18,860 | ||||||
John Wiley & Sons, Inc., Class A | 650 | 39,058 | ||||||
Liberty Global PLC, Class A (a) | 3,124 | 129,958 | ||||||
Liberty Global PLC, Series C (a) | 7,526 | 300,965 | ||||||
New York Times Company (The), Class A | 1,834 | 22,907 | ||||||
Scholastic Corporation | 347 | 12,291 | ||||||
Scripps Networks Interactive, Inc., Class A | 1,192 | 98,233 | ||||||
Time Warner Cable, Inc. | 3,927 | 569,808 | ||||||
Time Warner, Inc. | 12,641 | 1,049,456 | ||||||
2,734,770 | ||||||||
Consumer Services — 2.9% |
| |||||||
Choice Hotels International, Inc. | 432 | 20,256 | ||||||
Darden Restaurants, Inc. | 1,866 | 87,236 | ||||||
DeVry Education Group, Inc. | 874 | 34,934 | ||||||
Jack in the Box, Inc. | 579 | 33,113 | ||||||
Marriott International, Inc., Class A | 3,330 | 215,484 | ||||||
McDonald’s Corporation | 14,016 | 1,325,353 | ||||||
Royal Caribbean Cruises Ltd. | 2,337 | 139,402 | ||||||
Starbucks Corporation | 10,702 | 831,331 | ||||||
Vail Resorts, Inc. | 539 | 40,695 | ||||||
2,727,804 | ||||||||
Transportation — 2.8% |
| |||||||
ArcBest Corporation | 335 | 10,630 | ||||||
Avis Budget Group, Inc. (a) | 1,525 | 85,690 | ||||||
C.H. Robinson Worldwide, Inc. | 2,109 | 142,273 |
21
GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS
July 31, 2014continued
SHARES | VALUE | |||||||
Transportation — (continued) |
| |||||||
CSX Corporation | 14,215 | $ | 425,313 | |||||
Echo Global Logistics, Inc. (a) | 270 | 5,943 | ||||||
Expeditors International of Washington, Inc. | 2,879 | 124,315 | ||||||
Genesee & Wyoming, Inc., Class A (a) | 747 | 74,498 | ||||||
Hertz Global Holdings, Inc. (a) | 6,398 | 180,552 | ||||||
Norfolk Southern Corporation | 4,382 | 445,474 | ||||||
Ryder System, Inc. | 774 | 66,665 | ||||||
Southwest Airlines Company | 2,480 | 70,134 | ||||||
United Parcel Service, Inc., Class B | 10,071 | 977,793 | ||||||
Wesco Aircraft Holdings, Inc. (a) | 951 | 18,021 | ||||||
2,627,301 | ||||||||
Consumer Durables & Apparel — 2.6% |
| |||||||
Callaway Golf Company | 1,006 | 7,646 | ||||||
Columbia Sportswear Company | 201 | 15,027 | ||||||
CSS Industries, Inc. | 90 | 2,222 | ||||||
Deckers Outdoor Corporation (a) | 500 | 44,255 | ||||||
Ethan Allen Interiors, Inc. | 319 | 7,311 | ||||||
Hanesbrands, Inc. | 1,415 | 138,260 | ||||||
La-Z-Boy, Inc. | 774 | 16,285 | ||||||
Mattel, Inc. | 4,833 | 171,209 | ||||||
Meritage Homes Corporation (a) | 506 | 19,380 | ||||||
Michael Kors Holdings Ltd. (a) | 2,740 | 223,255 | ||||||
Mohawk Industries, Inc. (a) | 870 | 108,550 | ||||||
Newell Rubbermaid, Inc. | 3,920 | 127,322 | ||||||
NIKE, Inc., Class B | 10,015 | 772,457 | ||||||
Oxford Industries, Inc. | 198 | 11,795 | ||||||
Polaris Industries, Inc. | 883 | 130,278 | ||||||
PVH Corporation | 1,158 | 127,588 | ||||||
Tupperware Brands Corporation | 737 | 53,639 | ||||||
Under Armour, Inc., Class A (a) | 2,314 | 154,459 | ||||||
VF Corporation | 5,002 | 306,472 | ||||||
Wolverine World Wide, Inc. | 1,395 | 33,843 | ||||||
2,471,253 | ||||||||
Utilities — 1.8% |
| |||||||
American Water Works Company, Inc. | 2,549 | 121,766 | ||||||
Avista Corporation | 836 | 25,941 | ||||||
CenterPoint Energy, Inc. | 5,767 | 140,253 | ||||||
CMS Energy Corporation | 3,747 | 108,401 | ||||||
Consolidated Edison, Inc. | 4,153 | 232,942 | ||||||
Integrys Energy Group, Inc. | 1,147 | 75,197 | ||||||
MGE Energy, Inc. | 476 | 17,907 | ||||||
Utilities — (continued) |
| |||||||
New Jersey Resources Corporation | 580 | 29,626 | ||||||
NiSource, Inc. | 4,413 | 166,282 | ||||||
Northeast Utilities | 4,555 | 199,964 | ||||||
Northwest Natural Gas Company | 363 | 15,689 | ||||||
Pepco Holdings, Inc. | 3,551 | 95,344 | ||||||
Piedmont Natural Gas Company, Inc. | 1,062 | 36,841 | ||||||
Sempra Energy | 3,303 | 329,342 | ||||||
UGI Corporation | 1,638 | 79,509 | ||||||
WGL Holdings, Inc. | 707 | 27,559 | ||||||
1,702,563 | ||||||||
Renewable Energy & Energy Efficiency — 1.0% |
| |||||||
ITC Holdings Corporation | 2,253 | 81,333 | ||||||
Itron, Inc. (a) | 580 | 20,868 | ||||||
Johnson Controls, Inc. | 9,407 | 444,387 | ||||||
Ormat Technologies, Inc. | 191 | 4,926 | ||||||
Quanta Services, Inc. (a) | 3,018 | 101,073 | ||||||
SunPower Corporation (a) | 605 | 22,222 | ||||||
Tesla Motors, Inc. (a) | 1,220 | 272,426 | ||||||
947,235 | ||||||||
Commercial & Professional Services — 0.9% |
| |||||||
ACCO Brands Corporation (a) | 1,668 | 11,042 | ||||||
CBIZ, Inc. (a) | 516 | 4,211 | ||||||
Copart, Inc. (a) | 1,662 | 55,478 | ||||||
Corporate Executive Board Company (The) | 478 | 29,669 | ||||||
Deluxe Corporation | 710 | 39,057 | ||||||
Dun & Bradstreet Corporation (The) | 545 | 59,966 | ||||||
Exponent, Inc. | 166 | 11,799 | ||||||
Heidrick & Struggles International, Inc. | 189 | 3,529 | ||||||
HNI Corporation | 608 | 21,487 | ||||||
ICF International, Inc. (a) | 241 | 8,331 | ||||||
IHS, Inc., Class A (a) | 985 | 129,399 | ||||||
Interface, Inc. | 928 | 14,709 | ||||||
Iron Mountain, Inc. | 2,349 | 78,715 | ||||||
Kelly Services, Inc. | 413 | 6,583 | ||||||
Knoll, Inc. | 657 | 11,044 | ||||||
Manpowergroup, Inc. | 1,131 | 88,094 | ||||||
Navigant Consulting, Inc. (a) | 626 | 10,216 | ||||||
On Assignment, Inc. (a) | 659 | 17,800 | ||||||
R.R. Donnelley & Sons Company | 2,971 | 51,577 | ||||||
Resources Connection, Inc. | 503 | 7,595 | ||||||
Robert Half International, Inc. | 1,960 | 95,354 |
22
GREEN CENTURY EQUITY FUND PORTFOLIO OF INVESTMENTS
July 31, 2014concluded
SHARES | VALUE | |||||||
Commercial & Professional Services — (continued) |
| |||||||
RPX Corporation (a) | 613 | $ | 9,563 | |||||
Steelcase, Inc. | 1,317 | 19,887 | ||||||
Team, Inc. (a) | 246 | 9,744 | ||||||
Tetra Tech, Inc. | 918 | 22,289 | ||||||
TrueBlue, Inc. (a) | 550 | 14,844 | ||||||
United Stationers, Inc. | 543 | 20,949 | ||||||
852,931 | ||||||||
Automobiles & Components — 0.5% |
| |||||||
Autoliv, Inc. | 1,339 | 133,244 | ||||||
BorgWarner, Inc. | 3,231 | 201,129 | ||||||
Harley-Davidson, Inc. | 3,101 | 191,704 | ||||||
526,077 | ||||||||
Food & Staples Retailing — 0.4% |
| |||||||
Safeway, Inc. | 3,244 | 111,788 | ||||||
Sysco Corporation | 8,302 | 296,299 | ||||||
408,087 | ||||||||
Healthy Living — 0.3% |
| |||||||
Hain Celestial Group, Inc. (The) (a) | 719 | 61,475 | ||||||
United Natural Foods, Inc. (a) | 704 | 41,268 | ||||||
Whole Foods Market, Inc. | 5,285 | 201,993 | ||||||
304,736 | ||||||||
Total Common Stocks | 94,441,156 | |||||||
SHORT-TERM OBLIGATION — 0.7% | ||||||||
Repurchase Agreement — | 660,346 | |||||||
TOTAL INVESTMENTS (b) — 99.7% |
| |||||||
(Cost $70,584,297) | 95,101,502 | |||||||
Other Assets Less Liabilities — 0.3% | 256,624 | |||||||
NET ASSETS — 100.0% | $ | 95,358,126 | ||||||
(a) | Non-income producing security. |
(b) | The cost of investments for federal income tax purposes is $71,726,163 resulting in gross unrealized appreciation and depreciation of $24,745,240 and $1,369,901 respectively, or net unrealized appreciation of $23,375,339. |
See Notes to Financial Statements
23
GREEN CENTURY FUNDS STATEMENTS OF ASSETS AND LIABILITIES
July 31, 2014
BALANCED FUND | EQUITY FUND | |||||||
ASSETS: | ||||||||
Investments, at value (cost $103,383,204 and $70,584,297, respectively) | $ | 121,354,489 | $ | 95,101,502 | ||||
Receivables for: | ||||||||
Capital stock sold | 411,581 | 255,227 | ||||||
Interest | 263,364 | — | ||||||
Dividends | 32,344 | 118,380 | ||||||
Total assets | 122,061,778 | 95,475,109 | ||||||
LIABILITIES: | ||||||||
Payable for capital stock repurchased | 220 | 14,810 | ||||||
Accrued expenses | 154,675 | 102,173 | ||||||
Total liabilities | 154,895 | 116,983 | ||||||
NET ASSETS | $ | 121,906,883 | $ | 95,358,126 | ||||
NET ASSETS CONSIST OF: | ||||||||
Paid-in capital | $ | 97,756,076 | $ | 70,902,428 | ||||
Undistributed net investment income | 17,982 | 67,509 | ||||||
Accumulated net realized gains/(losses) on investments | 6,161,540 | (129,016 | ) | |||||
Net unrealized appreciation on investments | 17,971,285 | 24,517,205 | ||||||
NET ASSETS | $ | 121,906,883 | $ | 95,358,126 | ||||
SHARES OUTSTANDING (UNLIMITED NUMBER OF SHARES AUTHORIZED @ $0.01 PAR VALUE) | 5,134,208 | 3,166,980 | ||||||
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE | $ | 23.74 | $ | 30.11 | ||||
GREEN CENTURY FUNDS STATEMENTS OF OPERATIONS
For the year ended July 31, 2014
BALANCED FUND | EQUITY FUND | |||||||
INVESTMENT INCOME: | ||||||||
Interest income | $ | 499,264 | $ | — | ||||
Dividend and other income (net of $19,203 and $0 foreign withholding taxes, respectively) | 1,499,554 | 1,551,937 | ||||||
Total investment income | 1,998,818 | 1,551,937 | ||||||
EXPENSES: | ||||||||
Administrative services fee | 865,525 | 786,995 | ||||||
Investment advisory fee | 677,662 | 196,722 | ||||||
Total expenses | 1,543,187 | 983,717 | ||||||
NET INVESTMENT INCOME | 455,631 | 568,220 | ||||||
NET REALIZED AND UNREALIZED GAIN: | ||||||||
Net realized gain on investments | 8,602,576 | 5,398,934 | ||||||
Change in net unrealized appreciation on investments | 1,362,675 | 4,878,712 | ||||||
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS | 9,965,251 | 10,277,646 | ||||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 10,420,882 | $ | 10,845,866 | ||||
See Notes to Financial Statements
24
GREEN CENTURY FUNDS STATEMENTS OF CHANGES IN NET ASSETS
BALANCED FUND | EQUITY FUND | |||||||||||||||
FOR THE YEAR ENDED JULY 31, 2014 | FOR THE YEAR ENDED JULY 31, 2013 | FOR THE YEAR ENDED JULY 31, 2014 | FOR THE YEAR ENDED JULY 31, 2013 | |||||||||||||
INCREASE (DECREASE) IN NET ASSETS: | ||||||||||||||||
From operations: | ||||||||||||||||
Net investment income | $ | 455,631 | $ | 455,487 | $ | 568,220 | $ | 530,547 | ||||||||
Net realized gain on investments | 8,602,576 | 2,094,952 | 5,398,934 | 1,991,872 | ||||||||||||
Change in net unrealized appreciation on Investments | 1,362,675 | 9,690,750 | 4,878,712 | 11,554,662 | ||||||||||||
Net increase in net assets resulting from operations | 10,420,882 | 12,241,189 | 10,845,866 | 14,077,081 | ||||||||||||
Dividends and distributions to shareholders: | ||||||||||||||||
From net investment income | (440,410 | ) | (437,535 | ) | (486,355 | ) | (489,952 | ) | ||||||||
Capital share transactions: | ||||||||||||||||
Proceeds from sales of shares | 36,540,154 | 20,192,175 | 26,577,277 | 8,422,581 | ||||||||||||
Reinvestment of dividends and distributions | 428,141 | 426,694 | 476,684 | 482,186 | ||||||||||||
Payments for shares redeemed | (10,692,351 | ) | (5,570,183 | ) | (8,864,143 | ) | (6,654,752 | ) | ||||||||
Net increase in net assets resulting from capital share transactions | 26,275,944 | 15,048,686 | 18,189,818 | 2,250,015 | ||||||||||||
Total increase in net assets | 36,256,416 | 26,852,340 | 28,549,329 | 15,837,144 | ||||||||||||
NET ASSETS: | ||||||||||||||||
Beginning of year | 85,650,467 | 58,798,127 | 66,808,797 | 50,971,653 | ||||||||||||
End of year | $ | 121,906,883 | $ | 85,650,467 | $ | 95,358,126 | $ | 66,808,797 | ||||||||
Undistributed net investment income | 17,982 | 8,048 | 67,509 | 33,425 |
See Notes to Financial Statements
25
GREEN CENTURY BALANCED FUND FINANCIAL HIGHLIGHTS
FOR THE YEARS ENDED JULY 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value, beginning of year | $ | 21.43 | $ | 18.06 | $ | 17.50 | $ | 15.76 | $ | 14.75 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.09 | 0.13 | 0.10 | 0.13 | 0.18 | |||||||||||||||
Net realized and unrealized gain on investments | 2.31 | 3.37 | 0.56 | 1.75 | 1.01 | |||||||||||||||
Total increase from investment operations | 2.40 | 3.50 | 0.66 | 1.88 | 1.19 | |||||||||||||||
Less dividends: | ||||||||||||||||||||
Dividends from net investment income | (0.09 | ) | (0.13 | ) | (0.10 | ) | (0.14 | ) | (0.18 | ) | ||||||||||
Net Asset Value, end of year | $ | 23.74 | $ | 21.43 | $ | 18.06 | $ | 17.50 | $ | 15.76 | ||||||||||
Total return | 11.20 | % | 19.44 | % | 3.81 | % | 11.92 | % | 8.07 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (in 000’s) | $ | 121,907 | $ | 85,650 | $ | 58,798 | $ | 58,410 | $ | 52,761 | ||||||||||
Ratio of expenses to average net assets | 1.48 | % | 1.48 | % | 1.45 | % | 1.38 | % | 1.38 | % | ||||||||||
Ratio of net investment income to average net assets | 0.44 | % | 0.66 | % | 0.58 | % | 0.72 | % | 1.13 | % | ||||||||||
Portfolio turnover | 42 | % | 31 | % | 58 | % | 70 | % | 48 | % |
GREEN CENTURY EQUITY FUND FINANCIAL HIGHLIGHTS
FOR THE YEARS ENDED JULY 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value, beginning of year | $ | 26.30 | $ | 20.81 | $ | 19.99 | $ | 17.44 | $ | 15.65 | ||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income | 0.19 | 0.21 | 0.19 | 0.18 | 0.17 | |||||||||||||||
Net realized and unrealized gain on investments | 3.79 | 5.48 | 0.83 | 2.57 | 1.77 | |||||||||||||||
Total increase from investment operations | 3.98 | 5.69 | 1.02 | 2.75 | 1.94 | |||||||||||||||
Less dividends: | ||||||||||||||||||||
Dividends from net investment income | (0.17 | ) | (0.20 | ) | (0.20 | ) | (0.20 | ) | (0.15 | ) | ||||||||||
Distributions from net realized gains | — | — | — | — | — | |||||||||||||||
Total decrease from dividends | (0.17 | ) | (0.20 | ) | (0.20 | ) | (0.20 | ) | (0.15 | ) | ||||||||||
Net Asset Value, end of year | $ | 30.11 | $ | 26.30 | $ | 20.81 | $ | 19.99 | $ | 17.44 | ||||||||||
Total return | 15.16 | % | 27.49 | % | 5.14 | % | 15.77 | % | 12.39 | % | ||||||||||
Ratios/Supplemental data: | ||||||||||||||||||||
Net assets, end of year (in 000’s) | $ | 95,358 | $ | 66,809 | $ | 50,972 | $ | 53,363 | $ | 46,591 | ||||||||||
Ratio of expenses to average net assets | 1.25 | % | 1.25 | % | 1.16 | % | 0.95 | % | 0.95 | % | ||||||||||
Ratio of net investment income to average net assets | 0.72 | % | 0.92 | % | 0.97 | % | 0.92 | % | 0.97 | % | ||||||||||
Portfolio turnover | 32 | % | 17 | % | 14 | % | 13 | % | 13 | % |
See Notes to Financial Statements
26
GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTS
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 or valuation provided by a pricing service is deemed 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. |
Level 3 — significant unobservable inputs, including the Fund’s own assumptions in determining the fair value of investments. |
27
GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTScontinued
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 July 31, 2014: |
LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | |||||||||||||
COMMON STOCKS | $ | 81,106,871 | $ | — | $ | — | $ | 81,106,871 | ||||||||
BONDS & NOTES | — | 30,650,490 | — | 30,650,490 | ||||||||||||
CERTIFICATES OF DEPOSIT | — | 95,000 | — | 95,000 | ||||||||||||
SHORT-TERM OBLIGATIONS | — | 9,502,128 | — | 9,502,128 | ||||||||||||
TOTAL | $ | 81,106,871 | $ | 40,247,618 | $ | — | $ | 121,354,489 | ||||||||
The following is a summary of the inputs used to value the Equity Fund’s net assets as of July 31, 2014: |
LEVEL 1 | LEVEL 2 | LEVEL 3 | TOTAL | |||||||||||||
COMMON STOCKS | $ | 94,441,156 | $ | — | $ | — | $ | 94,441,156 | ||||||||
SHORT-TERM OBLIGATIONS | — | 660,346 | — | 660,346 | ||||||||||||
TOTAL | $ | 94,441,156 | $ | 660,346 | $ | — | $ | 95,101,502 | ||||||||
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 year ended July 31, 2014, 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 year ended July 31, 2014. It is the Funds’ policy to recognize transfers into and out of all Levels at the end of the reporting period. |
(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 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 |
28
GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTScontinued
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 year ended July 31, 2014, 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 July 31, 2014. Also, the Funds had recognized no interest and penalties related to uncertain tax benefits through July 31, 2014. At July 31, 2014, the tax years 2011 through 2014 remain open to examination by the Internal Revenue Service.
The Regulated Investment Company Modernization Act of 2010 (“RIC MOD”) was signed into law on December 22, 2010. RIC MOD 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.
(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 year ended July 31, 2014, the Balanced Fund and Equity Fund received $5,707 and $1,212, 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 |
29
GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTScontinued
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. As of the year ended July 31, 2014, no liability has been accrued. |
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 year ended July 31, 2014, Green Century accrued fees of $379,895 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 year ended July 31, 2014 Green Century accrued fees of $75,000 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 year ended July 31, 2014, Green Century accrued fees of $106,277 and $97,774 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 year ended July 31, 2014, Green Century accrued fees of $65,010 to MSCI. |
30
GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTScontinued
NOTE 3 — Investment Transactions
The Balanced Fund’s cost of purchases and proceeds from sales of securities, other than short-term securities, aggregated $63,628,907 and $40,575,619, respectively, for the year ended July 31, 2014. The Equity Fund’s cost of purchases and proceeds from sales of securities, other than short-term securities, aggregated $42,703,208 and $24,986,178, respectively.
NOTE 4 — Federal Income Tax Information
The tax basis of the components of distributable net earnings (deficit) at July 31, 2014 were as follows:
BALANCED FUND | EQUITY FUND | |||||||
Undistributed ordinary income | $ | 15,349 | $ | 51,229 | ||||
Undistributed long-term capital gains | 6,161,540 | 1,029,129 | ||||||
Tax accumulated earnings | 6,176,889 | 1,080,358 | ||||||
Accumulated capital and other losses | 0 | 0 | ||||||
Unrealized appreciation (depreciation) | 17,973,918 | 23,375,339 | ||||||
Distributable net earnings (deficit) | $ | 24,150,807 | $ | 24,455,697 | ||||
Capital loss carryovers are available to offset future realized capital gains and thereby reduce further taxable gain distributions. During the year ended July 31, 2014, the Balanced and Equity Fund utilized $2,441,130 and $4,414,798, respectively of their capital loss carryovers.
The tax character of distributions paid during the fiscal years ended July 31, 2014 and July 31, 2013 were as follows:
BALANCED FUND | EQUITY FUND | |||||||||||||||
YEAR ENDED JULY 31, 2014 | YEAR ENDED JULY 31, 2013 | YEAR ENDED JULY 31, 2014 | YEAR ENDED JULY 31, 2013 | |||||||||||||
Ordinary income | $ | 440,410 | $ | 437,535 | $ | 486,355 | $ | 489,952 | ||||||||
Long-term capital gains | — | — | — | — |
NOTE 5 — Capital Share Transactions
Capital Share transactions for the Balanced Fund and the Equity Fund were as follows:
BALANCED FUND | EQUITY FUND | |||||||||||||||
YEAR ENDED JULY 31, 2014 | YEAR ENDED JULY 31, 2013 | YEAR ENDED JULY 31, 2014 | YEAR ENDED JULY 31, 2013 | |||||||||||||
Shares sold | 1,581,678 | 1,000,325 | 922,022 | 355,575 | ||||||||||||
Reinvestment of dividends | 17,927 | 22,065 | 16,188 | 21,267 | ||||||||||||
Shares redeemed | (462,258 | ) | (281,498 | ) | (311,923 | ) | (285,551 | ) | ||||||||
1,137,347 | 740,892 | 626,287 | 91,291 | |||||||||||||
31
GREEN CENTURY FUNDS NOTES TO FINANCIAL STATEMENTSconcluded
NOTE 6 — Recent Accounting Pronouncements
In January 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-01 Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. This update gives additional clarification to the FASB ASU No. 2011-11 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. Management has assessed the potential impact, in addition to expanded financial statement disclosure, that may result from adopting ASU No. 2013-01 and determined there are no changes to the financial statements.
NOTE 7 — Subsequent Events
Subsequent to July 31, 2014 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.
32
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Trustees and Shareholders of
Green Century Funds:
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of the Green Century Balanced Fund and the Green Century Equity Fund (collectively the “Funds”), each a series of Green Century Funds as of July 31, 2014, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 31, 2014, by correspondence with custodian and brokers, or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the aforementioned Funds as of July 31, 2014, the results of their operations for the year then ended, the changes in their net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Boston, Massachusetts
September 25, 2014
33
TAX INFORMATION (unaudited)
For the year ended July 31, 2014, the Balanced and Equity Fund had 100% and 100%, respectively, of dividends paid from net investment income qualified for the 70% dividends received deduction available to corporate shareholders.
For the year ended July 31, 2014, the Balanced and Equity Fund had 100% and 100%, respectively, of dividends paid from net investment income, designated as qualified dividend income.
GREEN CENTURY FUNDS TRUSTEES AND OFFICERS
The following table presents information about each Trustee and each Officer of the Trust as of July 31, 2014. Each Trustee and each Officer of the Trust noted as an “interested person” (as defined in the 1940 Act), and noted with an asterisk, is interested by virtue of his or her position with Green Century as described below, with the exception of Mr. Comerford. Mr. Comerford is an “interested person” by virtue of his employment with Instinet, LLC, which may have provided brokerage services to Northern Trust Investments, Inc., the subadviser to the Equity Fund. The Trust does not hold annual shareholder meetings for the purpose of electing Trustees, and Trustees are not elected for fixed terms. This means that each Trustee will be elected to hold office until his or her successor is elected or until he or she retires, resigns, dies, or is removed from office.
The Trust’s Registration Statement includes additional information about the Trustees and is available, without charge, upon request by calling the following toll-free number: 1-800-93-GREEN.
NAME, ADDRESS AND AGE | POSITION(S) HELD WITH THE TRUST AND LENGTH OF TIME SERVED | PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS HELD | NUMBER OF PORTFOLIOS OVERSEEN BY TRUSTEE | |||
Independent Trustees: | ||||||
Stephen J. Morgan 104 Landing Drive Chapel Hill, NC 27514 Age: 66 | Trustee since 1991 | President, Clean Energy Solutions, Inc. (since 2008); Vice President, Clean Energy Solutions, Inc. (2007-2008). | 2 | |||
Bancroft R. Poor 114 State Street Suite 200 Boston, MA 02109 Age: 58 | Trustee since 2014 | Vice President for Operations/Chief Financial Officer/Assistant Treasurer, Massachusetts Audubon Society (since 1994); Trustee and Chair of Finance and Administration Committee, the Quebec Labrador Foundation (since 2007); Director and Treasurer of US Offshore Wind Collaborative (2010-2013). | 2 | |||
Mary Raftery 114 State Street Suite 200 Boston, MA 02109 Age: 49 | Trustee since 2009 | Senior Advisor, Funder Collaboration, ClimateWorks Foundation (since 2014); Organizational Development Consultant, Self-employed (since 2007); Director of Major Donor Development and Special Projects, BlueGreen Alliance (2011-2012); Chief Operating Officer, Apollo Alliance (2007-2011). | 2 |
34
NAME, ADDRESS AND AGE | POSITION(S) HELD WITH THE TRUST AND LENGTH OF TIME SERVED | PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS AND OTHER DIRECTORSHIPS HELD | NUMBER OF PORTFOLIOS OVERSEEN BY TRUSTEE | |||
James H. Starr 114 State Street Suite 200 Boston, MA 02109 Age: 66 | Chairperson since 2009; Trustee since 1991 | Director and President, Gunnison Valley Housing Foundation (since 2011); Director and Vice President, Coal Creek Watershed Coalition (since 2011); Chairperson, Gunnison Valley Transportation Authority (2004-2010); President, Peanut Mine, Inc. (2002-2012); Senior Attorney, Starr and Associates, PC (since 1982); County Commissioner, Gunnison County, CO (1999-2010); Director and Secretary, Crested Butte Land Trust (1991-2009). | 2 | |||
Interested Trustees: | ||||||
John Comerford* 114 State Street Suite 200 Boston, MA 02109 Age: 45 | Trustee since 2005 | Member, Board of Directors, BATS Global Markets (since 2011); Executive Managing Director, Instinet, LLC (since 2007). | 2 | |||
Douglas H. Phelps* 114 State Street Suite 200 Boston, MA 02109 Age: 67 | Trustee since 1997 | President (1996 to 2003) and Director (since 1996), Green Century Capital Management, Inc.; President and Executive Director, The Public Interest Network (since 1982); President, U.S. PIRG (since 1983); President, Environment America (since 2007); President, Telefund, Inc. (since 1988); President, Grassroots Campaigns, Inc. (Since 2003). | 2 | |||
Wendy Wendlandt* 114 State Street Suite 200 Boston, MA 02109 Age: 52 | Trustee since 1991 | Acting Director, Fair Share (since 2012); President (2006-2013) and Director (since 2006), Green Century Capital Management, Inc; Political Director, Fund for the Public Interest (since 1989), Senior Staff, Center for Public Interest Research (since 1989), President, Environment America Research and Policy Center (since 2007). | 2 | |||
Officers: | ||||||
Kristina A. Curtis* 114 State Street Suite 200 Boston, MA 02109 Age: 61 | President since 2005; Treasurer since 2008 and from 1991-2005 | Senior Vice President of Finance and Operations (since 2002), Treasurer and Director (since 1991), Senior Vice President (since 1991), Green Century Capital Management, Inc. | Not applicable | |||
Amy Puffer* 114 State Street Suite 200 Boston, MA 02109 Age: 55 | Chief Compliance Officer since 2004; Secretary and Assistant Treasurer since 2006 | Chief Compliance Officer (since 2004), Clerk and Director (since 2006), Green Century Capital Management, Inc. | Not applicable |
35
Annual Report
INVESTMENT ADVISER AND ADMINISTRATOR
Green Century Capital Management, Inc.
114 State Street
Boston, MA 02109
1-800-93-GREEN
www.greencentury.com
e-mail: info@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)
Northern Trust Investments, Inc.
50 South LaSalle Street
Chicago, IL 60603
COUNSEL TO INDEPENDENT TRUSTEES OF THE FUNDS
Ropes & Gray LLP
The 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
State Street Bank and Trust Company
State Street Financial Center
One Lincoln Street
Boston, MA 02111
TRANSFER AGENT
Huntington Asset Services, Inc.
2960 North Meridian Street, Suite 300
Indianapolis, IN 46208
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
Two Financial Center
60 South Street
Boston, MA 02111
July 31, 2014
Balanced Fund
Equity
Fund
An investment for your future.
Printed on recycled paper with soy-based ink.
Item 2. Code of Ethics
(a) | The registrant has adopted a Code of Ethics applicable to the registrant’s principal executive officer, principal financial officer and principal accounting officer or controller. |
(c) | During the period covered by this report, there were no amendments to the provisions of the Code of Ethics referred to in Item 2(a) above. |
(d) | During the period covered by this report, there were no implicit or explicit waivers to the provisions of the Code of Ethics referred to in Item 2(a) above. |
(e) | Not applicable. |
(f) | The Code of Ethics is incorporated by reference to the Registrant’s Form N-CSR filed on October 7, 2013. |
Item 3. Audit Committee Financial Expert
The Board of Trustees of the registrant has determined that Bancroft R. Poor, a member of the Board’s audit committee, qualifies as an “audit committee financial expert” as that term is defined in the instructions to Item 3 of Form N-CSR. Mr. Poor is “independent” as that term is defined in the instructions to Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services
(a) | Audit Fees. The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are as follows. |
For the fiscal year ended 7/31/14: $37,400.00
For the fiscal year ended 7/31/13: $37,400.00
(b) | Audit-Related Fees. No fees were billed in either of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this item. |
(c) | Tax Fees. The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning are as follows. The services comprising the fees disclosed under this category are tax compliance monitoring and tax filing preparation. |
For the fiscal year ended 7/31/14: $10,800.00
For the fiscal year ended 7/31/13: $10,800.00
(d) | All Other Fees. No fees were billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this item. |
(e)(1) | The Charter of the Audit Committee of the Board requires that the Committee approve (a) all audit and permissible non-audit services to be provided to the Funds and (b) all permissible non-audit services to be provided by the Funds’ independent auditors to the Funds’ investment adviser or administrator or any entity controlling, controlled by, or under common control with the investment adviser or administrator that provides ongoing services to the Funds, if the engagement relates directly to the operations and financial reporting of the Funds. The Audit Committee has the duty to consider whether the non-audit services provided by the Funds’ auditor to the Funds’ investment adviser, administrator, or any adviser affiliate that provides ongoing services to the Funds, which services were not pre-approved by the Audit Committee, are compatible with maintaining the auditor’s independence and to review and approve the fees proposed to be charged to the Funds by the auditors for each audit and non-audit service. |
(e)(2) | Zero percent of the services described in each of paragraphs (b) through (d) of this Item were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
(f) | Not applicable. |
(g) | The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant were the tax compliance, tax advice and tax planning fees listed in paragraph (c) of this Item and are as follows. No non-audit fees were billed by the registrant’s accountant for services rendered to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant. |
For the fiscal year ended 7/31/14: $10,800.00
For the fiscal year ended 7/31/13: $10,800.00
(h) | Not applicable. |
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 30a-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) | Code of Ethics: Incorporated by reference to the Registrant’s Form N-CSR filed on October 7, 2013. |
(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 A. Curtis |
Kristina A. Curtis |
President and Principal Executive Officer |
October 7, 2014 |
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 A. Curtis |
Kristina A. Curtis |
President and Principal Executive Officer |
October 7, 2014 |
/s/ Kristina A. Curtis |
Kristina A. Curtis |
Treasurer and Principal Financial Officer |
October 7, 2014 |