RSF in the Wall Street Journal
August 20, 2014
The RSF Social Investment Fund was recommended in the Wall Street Journal for the first time last Saturday, August 16, in an article titled “The Payoffs of Investing Locally.”
We’re thrilled to get such prominent coverage, and I have one brief clarification:
In the article, the journalist wrote, “returns are often lower than other fixed-income investments.” I want to address this statement.
Working directly with our investors over the past seven years, I have observed two primary reasons why they choose the RSF Social Investment Fund:
- They want to support inspiring social entrepreneurs.
- They want a low-volatility, liquid investment that has minimal downside risk.
Regarding #1, we have a track record of finding great social enterprises to support, often before a commercial bank will step in.
Regarding #2, we have a 100% repayment rate (principal + interest) to our investors since RSF was founded in 1984.
The investment is structured as a 90-day note, similar to a bank certificate-of-deposit (CD). Because of the liquidity and the low-risk profile, investors should consider the RSF Social Investment Fund as a part of their cash/savings asset allocation, not their fixed-income allocation. This is the critical point.
The Wall Street Journal writer correctly observes that the average return on our 90-day note over the past year has been 0.53%. This is two times the average financial return of bank CD’s with similar duration, according to Bankrate.com.
And with a big-bank CD, you have no idea where your money is being invested. It may be going to support small-business loans in your community, or it may be going to support clear-cutting of rainforests in Malaysia through the bank’s proprietary trading operations.
Nowhere else but with RSF can you find a bank CD-like investment (in terms of high-liquidity and low-risk) in a diversified direct-loan portfolio of over 90 phenomenal social enterprises, with an institution that has been a pioneer and a leader in social finance for over 30 years, with a minimum investment of $1,000. You know exactly which social enterprises receive loans from us (see a list of all our borrowers here). And the financial returns are actually superior to any comparable-term savings account or CD at a bank!
Thank you for your attention and interest. Again, we certainly appreciate the great story in the Wall Street Journal.
All the best,
President & CEO