Tax-Sheltered ESG Retirement-Saver Portfolios for Mutual Fund Investors
These mutual fund portfolios were developed with serious ESG investors in mind.
I’ve created a series of exchange-traded fund model portfolios geared toward people who are still accumulating assets for retirement inside tax-sheltered accounts (IRAs and so on).
About the Portfolios
I’ve created portfolios composed of exchange-traded funds as well as this series, which features mutual funds. The ETF portfolios are designed to incorporate investments that pass muster on the environmental, social, and governance front but have low “tracking error,” meaning that the portfolios’ performance is likely to hew closely to that of a portfolio consisting of plain-vanilla, non-ESG ETFs. With the mutual fund portfolios, I’ve incorporated mutual funds with more “ESG-forward” strategies.
Because the mutual fund portfolios encompass a heavier ESG emphasis than do the ETF portfolios, I would expect them to exhibit performance that differs more meaningfully from market benchmarks. And because the mutual fund portfolios have some exposure to active equity funds, their costs are a bit higher, too. I focused on funds that are widely available from major brokerage-firm platforms without a load or transaction fee.
The portfolios are geared toward investors’ tax-sheltered retirement accounts, so I didn’t consider holdings tax efficiency when populating the portfolios.
How to Use These Portfolio Examples
My key goal with these portfolios is to depict sound asset-allocation and portfolio-management principles rather than to shoot out the lights with performance. That means that investors can use them to help size up their own portfolios’ asset allocations and suballocations. Alternatively, investors can use the portfolios as a source of ideas in building out their own portfolios. As with the Bucket portfolios, I’ll employ a strategic (that is, long-term and hands-off) approach to asset allocation; I’ll make changes only when individual holdings encounter fundamental problems or changes, or if they no longer rate as higher-conviction Morningstar Medalists.
The portfolios vary in their amounts of stock exposure and, in turn, their risk levels. The Aggressive Portfolio is geared toward someone with many years until retirement and a high tolerance/capacity for short-term volatility. The Conservative portfolio is geared toward people who are just a few years shy of retirement. The Moderate portfolio falls between the two in terms of its risk/return potential.
Aggressive Tax-Deferred ESG Retirement-Saver Portfolio for Mutual Fund Investors
- Anticipated Time Horizon to Retirement: 35–40 years
- Risk Tolerance/Capacity: High
- Target Stock/Bond Mix: 95/5
Portfolio Allocations
- 35%: Calvert US Large Cap Core Responsible Index CSXAX
- 20%: Boston Trust Walden SMID Cap WASMX
- 40%: Calvert International Responsible Index CDHAX
- 5%: Pimco Total Return ESG PTSAX
Moderate Tax-Deferred ESG Retirement-Saver Portfolio for Mutual Fund Investors
- Anticipated Time Horizon to Retirement: 20–25 years
- Risk Tolerance/Capacity: Moderate
- Target Stock/Bond Mix: 80/20
Portfolio Allocations
- 35%: Calvert US Large Cap Core Responsible Index CSXAX
- 13%: Boston Trust Walden SMID Cap WASMX
- 32%: Calvert International Responsible Index CDHAX
- 20%: Pimco Total Return ESG PTSAX
Conservative Tax-Deferred ESG Retirement-Saver Portfolio for Mutual Fund Investors
- Anticipated Time Horizon to Retirement: 2–5 years
- Risk Tolerance/Capacity: Low
- Target Stock/Bond Mix: 50/50
Portfolio Allocations
Editor’s Note: A version of this article was previously published on April 29, 2025.
The author or authors own shares in one or more securities mentioned in this article. Find out about Morningstar’s editorial policies.
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