April 15, 2019
Via EDGAR
Alison White
Senior Counsel
Office of Disclosure and Review
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Re: The Boston Trust & Walden Funds: File Nos. 33-44964 and 811-06526
Dear Ms. White:
On February 15, 2019, The Boston Trust & Walden Funds (the “Trust”) filed Post-Effective Amendment No. 162 to its Registration Statement on Form N-1A. On April 1, 2019, you provided oral comments. The following is a summary of our understanding of your comments and the Trust’s responses. Where necessary, these responses will be incorporated into Post-Effective Amendment No. 163.
Comment 1: Please provide completed Fee Tables and Expense Examples prior to submitting the Trust’s Rule 485(b) filing.
Response: The updated Fee Tables and Expense Examples are attached hereto as Schedule A and will be included in the Trust’s Rule 485(b) filing.
Comment 2: For each series/fund of the Trust with an expense waiver agreement, please clarify in the preamble to the Expense Example that the waiver is only in effect for the duration of the agreement.
Response: The Trust has amended the relevant preambles to the Expense Examples to state the following:
The Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual Funds. The Example assumes a $10,000 investment, a 5% annual return, redemption at the end of each period and that the Fund’s operating expenses remain the same. The Example reflects the fee waiver and expense reimbursement for the
duration of the waiver/reimbursement period only.
Michael.Wible@ThompsonHine.com Phone: 614.469.3297 | ps 4815-7291-7905.1 |
Alison White
April 15, 2019
Page 2
Comment 3: In the “Principal Investment Strategies” summary disclosures for Boston Trust Midcap Fund, Boston Trust SMID Cap Fund and Boston Trust Small Cap Fund, please define “equity securities” as used in the second sentence of the each disclosure to include rights to purchase common stock.
Response: The Trust has amended the second sentence under “Principal Investment Strategies” for each of the aforementioned funds to state the following:
Equity securities include common stock and any rights to purchase common stock.
Comment 4: For each of Walden Asset Management Fund, Walden Equity Fund, Walden Midcap Fund, Walden SMID Cap Fund, Walden Small Cap Fund and Walden International Equity Fund (the “Walden Funds”), please clarify what is meant by “financially material” as it is used in the first sentence of the second paragraph under the heading “Principal Investment Strategies” in each Walden Fund summary, and as it is used on page 29 of the Prospectus under the heading “Environmental, Social & Governance (ESG) Guidelines.”
Response: The Trust has amended the relevant disclosures to state the following:
The Adviser evaluates financially material environmental, social, and governance (ESG) factors as part of the investment decision-making process for the Fund. The Adviser considers financial materiality as it is understood in generally accepted accounting principles—information that would impact the judgment of an informed investor. The Adviser’s ESG analysis considers the range of impacts that ESG factors may have on future revenues, expenses, assets, liabilities and overall risk.
Comment 5: Please include examples of the “products and services” referred to in the second sentence of the second paragraph under the heading “Principal Investment Strategies” in each of the Walden Fund summaries, and as it is used on page 29 of the Prospectus under the heading “Environmental, Social & Governance (ESG) Guidelines.” Please further explain what is meant by the terms “revenue dependence, market share and severity” in the same sentence.
Response: The Trust has amended the relevant disclosures to state the following:
The Fund is subject to screening criteria in which the Adviser excludes companies with significant exposure in specific products or services, considering their revenue dependence (share of total revenue derived from undesirable products/services), market share (if a company is a market leader in an
Alison White
April 15, 2019
Page 3
undesirable product despite relatively small share of total company revenue), and severity (how proximate is the product or service to the undesirable product—e.g., minor electronic input to a weapon system). Examples of products and services are found on page 29 of the Prospectus in the second paragraph under the heading “Environmental, Social & Governance Guidelines.”
Comment 6: Please clarify what is meant by “active ownership” in the last sentence of the second paragraph under the heading “Principal Investment Strategies” in each Walden Fund summary.
Response: The Trust has amended the last sentence under “Principal Investment Strategies” for each of the Walden Funds to state the following:
In addition, the Adviser utilizes active ownership to encourage more sustainable business policies and practices and greater ESG transparency. The Adviser encourages portfolio companies to improve their ESG performance and transparency through shareholder engagement. Engagement strategies include proxy voting, dialogue with company management and sponsorship of shareholder resolutions, and public policy advocacy.
Comment 7: In the second paragraph under the heading “Investment Process” on page 23 of the Prospectus, please consider whether “Security Selection,” “Portfolio Construction” and “Asset Allocation” should be capitalized.
Response: The Trust has rendered “security selection,” “portfolio construction” and “asset allocation” in lower case.
Comment 8: In the penultimate sentence of the first paragraph under the heading “Buy Discipline” on page 23 of the Prospectus, please re-state in plain English what is meant by the phrase “assesses its materiality with respect to a range of possible financial outcomes.”
Response: The Trust has amended the disclosure to state the following:
The Adviser also evaluates a company’s ESG performance and assesses its materiality with respect to a range of possible financial outcomes incorporates its determination of potential financial materiality related to such performance under various economic and business scenarios.
Alison White
April 15, 2019
Page 4
Comment 9: In the last sentence of the first paragraph under the heading “Buy Discipline” on page 23 of the Prospectus, please clarify what is meant by the phrase “at the rate of growth implied by their stock prices.” How can a stock price imply a rate of growth?
Response: The Trust has considered the Staff’s comment and respectfully declines to amend its disclosures. The Trust believes that, as written, the disclosure accurately describes instances where increased revenue does not correspond with a high stock price.
Comment 10: In the last sentence of the second paragraph under the heading “Buy Discipline” on page 23 of the Prospectus, please re-state in plain English what is meant by “duration management, yield curve strategies [and] segment composition.”
Response: The Trust has amended its disclosures to state the following:
The Adviser seeks to add value through various avenues of active management, including: duration management (judgments relating to the sensitivity of bonds to changes in interest rates), yield curve strategies (judgments regarding the future shape of the yield curve, and differential of short vs. long-term interest rates), segment composition (judgments related to the interest rate spread or premium afforded to various segments of the fixed income investment universe, including government, government agency, and corporate bonds), and individual security selection.
Comment 11: In the second and third bullet points under the heading “Portfolio Construction” on page 23 of the Prospectus, please specify what is meant by “financial characteristics” as used in the second bullet point and by “valuation characteristics” as used in the third bullet point. What does “higher quality” mean with respect to “financial characteristics”?
Response: The Trust has amended its disclosures to state the following:
· In the aggregate, each Fund’s equity holdings have financial characteristics the Adviser judges to be higher quality than its investment universe. Financial characteristics such as leverage ratios, returns on equity or invested capital, are important considerations in the Adviser’s determination of the risk profile of a company. Higher quality with regard to any financial statement metric refers to the transparency, consistency, accuracy and integrity over time of the financial statements;
· In the aggregate, each Fund’s equity holdings have valuation characteristics the Adviser judges to be comparable or more attractive than its investment
Alison White
April 15, 2019
Page 5
universe. Key valuation characteristics include price to earnings ratio, earnings per share and free cash flow or free cash flow per share.
Comment 12: In the Trust’s disclosure of “Currency Risk” on page 28 of the Prospectus, please consider whether the sentence beginning “[s]ome emerging market countries may have fixed or managed currencies . . .” is necessary given that none of the funds in the Trust invest in emerging market countries as a principal investment strategy.
Response: The Trust has deleted the sentence from its “Currency Risk” disclosure.
Comment 13: Please consider re-casting the Trust’s “Active Ownership Guidelines” on page 29 of the Prospectus in a manner consistent with the fact sheet on the Trust’s website.
Response: The Trust has amended its disclosures to state the following:
The Adviser utilized active ownership to encourage more sustainable business practices and greater ESG transparency. The Adviser encourages portfolio companies to improve their ESG performance and transparency through shareholder engagement. Engagement strategies include proxy voting, dialogue with company management and sponsorship of shareholder resolutions, and public policy advocacy: Active ownership strategies include:
Comment 14: With respect to the Trust’s disclosure under the heading “Instructions for Selling Shares” on page 32 of the Prospectus, please note that Item 11(c)(7) of Form N-1A requires that the Trust disclose the number of days following receipt of the request that the Trust will send proceeds. The current disclosure states the number of days following receipt of the request that the shareholder will receive proceeds.
Response: The Trust has amended its disclosures to state the following:
Normally you will receive your the Funds will send proceeds, by check or electronic transfer, within seven (7) days after your request is received.
Comment 15: In the paragraph under the heading “Redemption in Kind” on page 33 of the Prospectus, please disclose whether redemptions in kind would be pro rata slices of the portfolio’s assets, a representative basket of securities or individually selected securities.
Response: The Trust has added the following disclosure to the paragraph:
Alison White
April 15, 2019
Page 6
If a either Fund deems it advisable for the benefit of all shareholders, redemption in kind will consist of securities equal in market value to your shares. To the extent feasible, the Fund expects that a redemption in kind would be a pro rata allocation of the Fund’s portfolio.
Comment 16: In the penultimate paragraph on page 35 of the Prospectus, please correct the date through which the expense waiver agreements of the relevant series of the Trust is effective.
Response: The Trust has amended the disclosure to state as follows:
The Funds’ agreement is effective through May 1, 2019 2020.
Comment 17: Please conform the disclosure in the last sentence of the penultimate paragraph on page 35 to the disclosures in the footnotes to the relevant Fee Tables regarding when repayment must be made to the adviser.
Response: The Trust has amended the last sentence of the paragraph to state as follows:
. . . of its average daily net assets and the repayment is made within three fiscal years following the date fiscal year in on which the expenses occurred.
Very truly yours, |
|
|
|
/s/ Michael V. Wible |
|
Michael V. Wible |
|
Alison White April 15, 2019 Page 7 Schedule A – Fee Tables and Expense Examples Boston Trust Asset Management Fund
Alison White April 15, 2019 Page 8 Boston Trust Equity Fund
Alison White April 15, 2019 Page 9 Boston Trust Midcap Fund
Alison White April 15, 2019 Page 10 Boston Trust SMID Cap Fund
Alison White April 15, 2019 Page 11 Boston Trust Small Cap Fund
Alison White April 15, 2019 Page 12 Walden Asset Management Fund
Alison White April 15, 2019 Page 13 Walden Equity Fund
Alison White April 15, 2019 Page 14 Walden Midcap Fund
Alison White April 15, 2019 Page 15 Walden SMID Cap Fund
Alison White April 15, 2019 Page 16 Walden Small Cap Fund
Alison White April 15, 2019 Page 17 Walden International Equity Fund