The team managing Calvert’s model portfolio series employs a sensible, but conventional, asset allocation process, allowing the underlying funds' ESG security selection to drive most of the series’ performance. The series earns a Neutral Morningstar Analyst Rating.
This series of model portfolios is available to financial advisors who retain discretion over asset allocation, underlying fund selection, and trading.
Comanagers Dan Strelow and Justin Bourgette have run this model portfolio series since its inception in 2017. They assumed leadership of the firm’s allocation mutual funds when Eaton Vance acquired Calvert in late 2016. However, the duo has worked together on Eaton Vance’s Global Income team since 2006. This team’s expertise is based in fixed-income security selection and sector rotation, making them an imperfect match for this mandate focused on multi-asset portfolio construction.
This series features five model portfolios with strategic equity targets set at 20%, 35%, 60%, 85%, and 98%. The Conservative, Moderate, and Growth portfolios resemble the firm’s mutual funds of the same names. The approach relies heavily on the firm’s capital markets assumptions, which evaluate a standard set of factors related to global macroeconomic growth, fundamental factors, and valuation. Overall, the process is reasonable but doesn’t offer a clear edge versus peers.
The underlying funds adhere to Calvert’s Principles for Responsible Investment, which is a robust materiality-driven approach to sustainable investing. Holdings such as Neutral-rate Calvert Bond CBDIX and Neutral-rated Calvert Balanced CBAIX earn a Morningstar ESG Commitment Level of Leader, a new qualitative assessment of ESG integration. Leader is the highest level, reflecting a top-notch approach. This ESG methodology is sound, but it leads to an underweight to energy stcks, and it could cause the funds to underperform when ESG-friendly companies are out of favor.
Model portfolios only provide guidance, users must implement their suggested trades and rebalance on their own. Investors’ results will vary depending on how closely they follow this profile’s recommendations.
General Advice Warning
Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.