Daniel Boone III has pioneering in his blood -- he is a descendant of Daniel Boone, the legendary American frontiersman of the early 18th century. "I like to think of myself as an adventurer," says Boone, whose $900 million Calvert Social Investment Equity fund is a winner in the large-cap blend category.
Boone, 59, began his journey as a socially responsible investor in the 1980s, when he managed money for his church. Boone "agonized" over his decision to sell the stocks of companies that were doing business in South Africa. Boone believes such protest sales helped eliminate that country's apartheid practices. "In the end, the pressure worked," he says. That's one reason Calvert Group hired Boone's firm, Atlanta Capital Management, to run its social investment equity fund.
Many naysayers have argued that mixing a social agenda with investing doesn't work. Boone's track record squashes that. The fund's strong performance -- it has gained an annualized 7.6% for the past five years, through Dec. 31, 2003, vs. a -0.4% loss for the Standard & Poor's 500-stock index -- shows that you can do very well by doing good.
SOCIAL CRITERIA. The stocks that make it into the fund's concentrated 50-stock portfolio are culled from a list of companies that pass minimum social criteria in seven areas -- product safety, the environment, workplace practices, corporate governance, treatment of indigenous peoples, global human rights, and community relations. Companies that clear those hurdles tend to be better corporate citizens, he says.
Boone uses more traditional screens, too, of course. Companies must have a strong 10-year financial track record. They also need to be industry leaders, and while dividends are not a requirement for this fund, most of the stocks in its portfolio pay them.
Boone also analyzes macro trends. For example, he believes U.S. companies will continue to spend on technology. So he's overweighted in tech holdings such as Microsoft (MSFT), Dell (DELL), Intel (INTC), and Cisco Systems (CSCO).
In addition to his socially responsible investing, Boone practices what he preaches: He's on the board of the Atlanta chapter of Habitat for Humanity, which builds homes for low-income families. He's also an avid fly fisherman. "That's a gene I inherited -- I like to be outside," he says. That's fine -- as long he keeps netting winning stocks, too.