iShares KLD 400 Social Index ETF (DSI)

[In light of my postings on my Facebook's FSX application, I'll also do the same here for my other portfolios (with real money as opposed to FSX's virtual money). Though I won't put the amount here, I'll still put the position I have or currently targeting. I do have several portfolios, though I am still undecided how to categorize them. For the moment, my postings will comment on the all ETF, multi-purpose, and taxable portfolio.]

iShares KLD 400 Social Index Fund (DSI) is an ETF that seeks to match the performance (price and yield) of the Domini 400 Social Index, which is the DSI's underlying index. The ETF holds 401 securities (as of July 27, 2008) and puts its 99.8% holdings fully invested in stocks. Average annual turnover is 4% and total net assets is USD 58.3 million. Its inception date was November 14, 2006 and has returned -5.61% (as of June 30, 2008) since then. For comparison, S&P 500 has performed by -5.15% during the same period (the market has been in a difficult period).

So, what makes the Domini 400 Social Index? The Index is a float-adjusted, market-capitalization weighted (much like S&P 500), common-stock index of US equities. The Index excludes companies with main businesses in tobacco, alcohol, firearm, gambling, military weaponry, and nuclear power plant. Also excluded are companies that have controversial issues on human rights, labor standards, diversity, accounting, and product quality. The Index puts positive screen on companies that have strong relationships with its stakeholders: communities, customers, ecosystems, employees, shareholders, and suppliers. As a result, the Index tends to overweight Information Technology sector (22% weighting as of June 30, 2008) and underweight Energy (6%) and Utilities (2%).

When selecting companies for the Index, KLD Research & Analytics, the Index maker, maintain the composition of the holdings to 250 companies under the S&P 500 Index, 100 additional large and mid cap companies for sector diversification, and 50 smaller companies with exemplary social, environmental, and governance records. Its five largest holdings (as of July 27, 2008) are Microsoft, Procter & Gamble, Johnson & Johnson, AT&T, and Apple.

With expense ratio of 0.5%, DSI is a viable alternative to mutual funds. And with Beta of 1 (to S&P 500), it is also a viable alternative to S&P 500 Index-tracking securities. Morningstar category for DSI is Large Blend (as of July 27, 2008). As such, I placed it under my core holdings, with target position of up to 20% of my portfolio (subject to change, but for the moment, that is the maximum position I put for large cap US equity portion). As an anchor, DSI fits the bill due to its diversified, large-cap tilt, US-based, market-cap weighted, low expense, low turnover, and especially being the only socially responsible instrument at the moment with all those characteristics.

Manga Mark Mobius - An Illustrated Biography of the Father of Emerging Markets Funds by Kaoru Kurotani

Manga Mark Mobius - An Illustrated Biography of the Father of Emerging Markets Funds by Kaoru Kurotani

My review

rating: 3 of 5 stars
[My review is based on the Bahasa (Indonesian) translation of this book]

Certainly not the first economic/finance book using comic style that I've read. But, the manga style proved the be the first for me and so far the best at conveying the topic in a comic book format. It is a short biography of Mark Mobius, and a crash course to investing in emerging market countries. There are plenty of historical examples where Mobius had encountered various situations that called for important investment decisions and his rationale behind them. Also illustrated in the manga, side stories that adds to the overall nuance of the biography.

The book has piqued my interest to read more on Mobius some time in the future, and also on Templeton, the firm where he worked as a fund manager specializing in emerging market.

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Go Green, Live Rich: 50 Simple Ways to Save the Earth and Get Rich Trying by David Bach

Go Green, Live Rich: 50 Simple Ways to Save the Earth and Get Rich Trying by David Bach

My review

rating: 3 of 5 stars
David Bach is the writer of the popular Finish Rich series. I haven't read his other books, so I can't comment on the series yet.

In Go Green, Bach starts with a chapter on knowing your impact on the environment, opening up the setting for the whole book. For the next nine chapters, Bach outlines some fifty tips on changing your behaviors so not only you would save the planet, but also save up some cash in the process (much like what William McDonough advocates that being green equals being efficient equals saving money). Those cash, if invested at certain percentage of return, will bring pretty sum thanks to compounding effect. The fifty tips cover a whole gamut from transportation, housing, water use, food, recycling, work environment, to traveling among others. Almost all are relatively easy and not as time consuming as one would expect. It just a matter of getting it started, habit will continue the rest.

Of course it won't be an investing book, if there's no tips regarding personal investment. Well, in chapter 10, Finish Rich: Make Your First Green Million, Bach gives some ideas on investing green and starting your green business.

Lastly, a good quote from the book regardless whether you ends up living and investing green or not, "It is not what you earn that makes you rich or poor; it is what you spend."

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Learn to Earn: A Beginner's Guide to the Basics of Investing and Business by Peter Lynch

Learn to Earn: A Beginner's Guide to the Basics of Investing and Business by Peter Lynch

My review

rating: 5 of 5 stars
This book holds sentimental value to me, for it introduced me to the world of investment. A world which, later, not only becomes a personal interest but also a professional one. I started my first investment in stocks and mutual funds shortly after I finished the book. Fast forward, I started my career five years later in an Indonesian state-owned investment bank in the equity research department.

In this book, Peter Lynch starts with a brief history of what would become Corporate America and later, describes how it can change and have changed the fortune of ordinary Americans who participate by owning the shares of those companies. It pays to start early, and only invest in what you know, as often as possible, compounding works.

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