Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110
December 21, 2005
VIA EDGAR
U.S. Securities and Exchange Commission
Division of Investment Management
100 F Street, NE
Washington, D.C. 20549
Attn.: Mrs. Patricia Williams
Re: Green Century Funds
File Nos. 33-41692 and 811-06351
Dear Mrs. Williams:
This letter is in response to comments we received from you on December
12, 2005 regarding the preliminary letter to shareholders, overview of proxy
statement, notice of special meeting, proxy statement, exhibits and proxy card
(collectively, the "Proxy Statement") filed by Green Century Funds (the
"Registrant") with respect to its series, Green Century Balanced Fund (the
"Balanced Fund") and Green Century Equity Fund (the "Equity Fund" and
collectively with the Balanced Fund, "the Funds") with the Securities and
Exchange Commission (the "Commission").
Below are the Staff's comments regarding the Proxy Statement and the
Registrant's responses thereto:
A. Proposal 2. Approval of New Investment Subadvisory Agreement for the Balanced
Fund
Comment: The Staff notes that the description of the subadvisory fee payable
to Adams Harkness Asset Management by the Balanced Fund under the
subadvisory agreement that was terminated on November 27, 2005 does
not indicate a "null zone" in which the fee does not increase or
decrease as a result of any positive or negative changes in the
Fund's performance.
Response: The Balanced Fund paid to Adams Harkness Asset Management a base fee
equal on an annual basis to 0.40% of the value of the average daily
net assets of the Fund. As described in the Proxy Statement, the
Base Fee did not increase or decrease unless the Balanced Fund's
total return differed from the total return of the Lipper Directors'
Analytical Data Balanced Fund Average (the "Index Total Return") by
positive or negative 1.00%. In order to clarify the null zone in the
subadvisory fee payable to Adams Harkness Asset Management, the
Registrant has added the description: "Base Fee" to the line in the
table with respect to the fee of 0.40% payable if the Fund's total
return differed from the Index Total Return by negative 0.99% to
positive 0.99%.
U.S. Securities and Exchange Commission
December 21, 2005
Page 2
B. Proposal 3. Approval of New Declaration of Trust for the Funds
1.Comment: The Staff requests that the following proposed changes to the
Declaration of the Trust for the Funds be presented as separate
proposals:
i. Reorganization of the Trust or any Fund or any Class of Shares
ii. Future Amendments
iii. Investment in Other Investment Companies
iv. Redemption
v. Dollar-Weighted Voting
vi. Other Changes
Response: The Registrant has revised the proxy statement to present the
above-described proposed changes to the Declaration of Trust for the
Funds as separate proposals.
2.Comment: The Staff asked that the Registrant provide additional disclosure
about the circumstances in which the Trustees may seek to specify
additional conditions to the redemption of shares, consistent with
the Investment Company Act of 1940, as amended (the "1940 Act").
Response: The Registrant has added additional disclosure about the
circumstances in which the Trustees may impose additional
conditions to the redemption of shares, consistent with the 1940
Act.
3.Comment: The Staff requests that the section of the Proxy
Statement discussing classes of shares, which explains that the
proposal clarifies that the Trustees can divide shares of the
Registrant or any Fund into one or more classes, include an
explanation as to how the proposed new provisions compare to
existing provisions in the existing Declaration of Trust.
Response: The Registrant has added that the existing Declaration of Trust did
not specifically address the Trustees' authority to establish
classes of shares.
4.Comment: Paragraph Number 1 of the "Other Changes" section of
the Proxy Statement explains that the new Declaration of Trust
would permit the Funds to enter into and amend investment
advisory and subadvisory agreements without shareholder approval
if permitted by applicable law. The Staff requests that the
Registrant provide additional disclosure regarding the impact of
this proposed change on shareholders.
Response: The Registrant has added the requested disclosure.
5.Comment: Paragraph Number 4 of the "Other Changes" section of
the Proxy Statement explains that the new Declaration of Trust
would permit the Trustees to invest Fund assets in all types of
investments, including derivatives. The Staff requests that the
Registrant provide risk disclosure regarding investments in
derivatives.
Response: The Registrant has made the requested disclosure.
U.S. Securities and Exchange Commission
December 21, 2005
Page 3
6.Comment: The Staff requests that the Registrant discuss why the Board
approved the proposed changes to the Declaration of Trust discussed
in Paragraph Numbers 3, 16, 17, 18 and 20 of the "Other Changes"
section of the Proxy Statement.
Response: The Registrant has added the requested disclosure.
7.Comment: The Staff requests that the Registrant discuss why the
Board approved the proposed changes to the Declaration of Trust
discussed in Paragraph Number 19 of the "Other Changes" section
of the Proxy Statement, which would provide that shareholders
may not bring suit on behalf of a Fund or the Registrant without
first requesting that the Trustees bring such suit, and that
shareholders will not be entitled to participate in a derivative
or class action on behalf of any Fund or the shareholders of any
other Fund, and vice versa.
Response: The Registrant notes that the discussion in Paragraph Number 19 of
the "Other Changes" section of the Proxy Statement currently
specifies that:
"The effect of these changes may be to discourage suits brought
by shareholders. Given that the Trustees have a fiduciary
obligation to act on your behalf and in your best interests when
evaluating whether to bring a suit on your behalf, the Trustees
believe that the changes may only discourage frivolous suits
that would cause the Funds to incur unnecessary costs."
The Registrant respectfully submits that the current disclosure
adequately explains why the Board approved the proposed change
to the Declaration of Trust and that no additional discussion of
the Board's reasoning is necessary.
C.Proposal Numbers 4 and 5: Approval of Changes to and the Elimination of
Certain Fundamental Investment Policies for the Balanced Fund and the Equity
Fund
1.Comment: Proposal D. - Real Estate and Commodities. The Registrant proposes
that the fundamental investment policy for each Fund regarding
commodities or commodity contracts be separated from the fundamental
investment policy regarding investment in real estate and real
estate limited partnerships. The Staff notes that the proposed
policy regarding commodities and commodity contracts would provide
that the restriction does not apply to investments in futures
contracts or options on futures contracts. The Staff requests that
the Registrant provide risk disclosure regarding investments in
futures and options.
Response: The Registrant has added the requested disclosure.
2.Comment: Proposal F. - Issuance of Senior Securities. The
Registrant proposes that the fundamental investment policy
concerning the issuance of senior securities be revised to state
that the Balanced Fund and Equity Fund may not issue senior
securities if such issuance is specifically prohibited by the
1940 Act. The Staff contends that since the Funds do not issue
senior securities, the statement in the discussion of this
proposal that "minor technical changes are proposed to be made
to the Equity Fund's existing fundamental policy regarding the
issuance of senior securities that are not expected to have a
material effect on the operations or management of the Equity
Fund" is misleading.
U.S. Securities and Exchange Commission
December 21, 2005
Page 4
Response: The Registrant has deleted the statement that "minor technical
changes are proposed to be made to the Equity Fund's existing
fundamental policy regarding the issuance of senior securities
that are not expected to have a material effect on the
operations or management of the Equity Fund" and revised the
disclosure to describe the changes proposed in more detail.
3.Comment: Proposal H. - Concentration. The Registrant proposes
that the fundamental investment policy of each Fund restricting
concentration in any one industry be amended to clarify that all
or any portion of the assets of each Fund may be invested in one
or more investment companies. The Staff notes that the Equity
Fund is a feeder fund that invests all of its assets in a master
fund, and requests that the Registrant explain how the Equity
Fund looks through to the investments of the master fund for
purposes of determining industry concentration.
Response: The Registrant has revised the disclosure to clarify that the
proposed concentration policy for the Equity Fund will be the
same as the concentration policy currently in place for the
master fund in which the Equity Fund invests.
4.Comment: Proposal K. - Diversification. The Registrant proposes that the
fundamental investment policy that restricts the Equity Fund, with
respect to 75% of its assets, from investing more than 5% of its
assets in any one company be eliminated, and replaced with two
non-fundamental policies. The Staff requests that the Registrant
explain in its response to the Staff how the proposed change from a
fundamental to a non-fundamental policy is consistent with Section
13a-1 of the 1940 Act, which provides that a registered investment
company may not change its subclassification from a diversified to a
non-diversified company unless authorized by shareholder vote.
Response: As a diversified investment company, each Fund must comply with the
diversification requirements of the 1940 Act unless it changes its
classification to non-diversified. The Registrant is not changing
the status of either Fund as a diversified company without
shareholder approval. Each Fund remains subject to Section 13a-1 of
the 1940 Act (which requires a Fund to obtain the approval of
shareholders to change its subclassification from a diversified to a
non-diversified company). The proposed change of the Funds'
fundamental policy regarding diversification to a non-fundamental
policy does not mean that the Funds do not still need to comply with
Section 13a-1.
D. Part 4. Discussion of Annual Report
Comment: The discussion of the availability of the Funds' Annual Report
is placed at the end of the proxy statement. The Proxy Rules
require that the discussion of the availability of the Funds'
Annual Report be placed in a prominent position in the proxy
statement. The Staff interprets this requirement to mean that
the discussion of the availability of the Funds' Annual Report
must be placed near the front of the proxy statement, and
requests that the Registrant place the discussion of the
availability of the Funds' Annual Report near the front of the
proxy statement.
U.S. Securities and Exchange Commission
December 21, 2005
Page 5
Response: The Registrant has moved the discussion of the availability of
the Funds' Annual Report to the first page of the Proxy
Statement, immediately after the Overview of Proxy Statement and
Notice of Special Meeting.
* * * * * *
We hope that this letter addresses your comments with respect to the
Registrant's preliminary Proxy Statement. Please note that attached is a letter
from the Registrant to the Commission that includes certain "Tandy"
acknowledgments. If you should have any further questions, please do not
hesitate to contact me at 617-951-8760.
Sincerely,
/s/ Toby R. Serkin
Toby R. Serkin