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3 Impact Investments Offering 7-15%+ Yields in Today's Bear Market
By Justin Kuepper
Oct 11, 2022
Oct 11, 2022
The S&P 500 index is down more than 25% since January, and with the Federal Reserve hiking interest rates, there could be more red ahead. But fortunately, there are opportunities to earn an attractive income in today's market. And some of these opportunities enable you to make a positive impact on climate change, affordable housing, and other areas.
Let's look at three impact investments offering fixed returns of at least 7% annually and, in some cases, upwards of 15% per year.
#1. Energea's Brazil Portfolio
Energea develops utility-scale solar projects in the U.S., Brazil, and South Africa. While the U.S. projects target a 6-8% IRR, the company's Brazil portfolio has a 14-16% estimated IRR, making it an attractive opportunity for investors. In addition, the company distributes portfolio income every month, providing a steady source of income.
When you invest, you're buying equity shares in a Delaware-based LLC that holds a portfolio of renewable energy projects. These projects generate revenue by selling solar-generated electricity through power purchase agreements. Each month, the company distributes all cash after covering monthly operational expenses to investors pro-rata.
Of course, there are a few risks to keep in mind. First, these projects generate income in Brazilian reals, meaning there's some foreign exchange rate risk. And second, the investments have a minimum three-year holding period before the company will make reasonable efforts to repurchase stock from investors.
#2. SmallChange's Venture on 12th
SmallChange makes it easy for anyone to invest in affordable housing and other impactful real estate projects. For example, current projects include a business converting garages into affordable workforce housing and a developer hoping to build a Detroit neighborhood market in an area that lacks access to healthy food and drink options.
The Venture on 12th Place is a high-return offering that aims to raise up to $500,000 to renovate an existing 30-unit property in Phoenix, AZ, before refinancing or selling the property within three years. The managers hope to distribute a 6% cash-on-cash return eight months after the acquisition while offering an additional "true up" to bring returns to 12%.
Of course, these real estate investments involve a higher level of risk than many conventional blue-chip stocks and bonds. While the Venture on 12th Place developer has a strong track record, investors should remember that rising interest rates and a cooling real estate market could negatively impact the project's economics over the coming years.
#3. Raise Green's NEIF Offering
Raise Green is a FINRA and SEC-registered marketplace where anyone can directly invest in climate solutions. For example, these investments might include everything from debt financing for a specific solar array to equity in a seed-stage climate startup. As a result, it's an excellent opportunity to add impact to any investment portfolio.
The National Energy Improvement Fund (NEIF) Climate Action Preferred Investment Certificates offering aims to raise up to $2 million to make homes and buildings stronger, healthier, and more efficient. The non-voting preferred equity offers an annual 7.00% interest rate and is redeemable via 28 quarterly payments over seven years.
The company provides fixed, guaranteed monthly payment financing programs to help improve the affordability of financing for vital energy and resilience improvements. In addition, the NEIF is the nation's only Certified B-Corp and US DOE Home Improvement Expert Lender, providing trusted financing through a national network.
Where to Find More Opportunities
You don't have to sacrifice returns to make a positive impact in the world – many impact investments offer compelling returns and the ability to accelerate the transition to renewable energy or increase affordable housing stocks. At VirtueVest, we specialize in helping helping investors add impact to their portfolios through education and discovery.
Browse more impact investments or check out our Impact Guide to get started.