GreenCentryFunds

As the third quarter of 2008 came to a close, investors may be feeling they have been battered by the combined forces of Hurricanes Fannie, Freddie, Lehman, and AIG in quick succession. While the recent turmoil in the markets may cause upheaval on the scale of Hurricanes Katrina or Ike, historically the financial markets have proved resilient in the long run. The government has begun to take steps to address the situation, though no one knows which direction the markets may head in the near future.

In the midst of these changes, Green Century Capital Management (“Green Century”) would like to share our perspective on the recent market activity and its impact on Green Century Funds investors. Below is information on how our portfolio managers have dealt with some of the more troubled companies held by the Funds, their thoughts on the current financial situation, and how the Funds have performed relative to their benchmarks.

Green Century’s environmentally focused investment strategy is built on a long-term outlook. While Wall Street’s time frame is often 3 months, the planet’s is more on the scale of 3 million years. Environmental destruction and restoration is not always visible on a quarter-by-quarter basis, but certainly becomes apparent over the long-term. With this as an underlying principle, neither of the Green Century Funds has significantly altered course as a result of the current market conditions.

Adam Seitchik of Trillium Asset Management leads the team of the Green Century Balanced Fund’s portfolio managers. Starting last year, the Balanced Fund trimmed its holdings in the Financial sector in response to signs of distress from the troubled housing markets and the portfolio management team is closely monitoring the current crisis. The Fund continues to hold small positions in Fannie Mae¹, and Freddie Mac¹, American General Financial Corporation¹, and Lehman Brothers Holdings¹ bonds because these securities could provide a competitive long-term return. In the Financial sector, the Fund has sold its American International Group¹ (AIG) stock but continues to hold Barclays PLC¹ and Bank of America Corporation¹ as well as Goldman Sachs Group, Inc.¹, and JPMorgan Chase & Company¹.

As Adam notes, "responsible investing is patient and forward-looking. For socially responsible investors, this crisis demonstrates once again that a sustainable economy requires a balance between free-market forces and vigorous regulatory oversight.

"The credit crunch now facing the financial system has led to a bear market in stocks, and is pushing the economy into recession. These are the most stressful of financial times, when it is most important to stick to the fundamentals of an investment strategy, including my belief that, over long periods of time, stocks could produce annualized returns of 8 to 10% and provide the basis for wealth building. As the last year has made obvious, stock investing is not a short-term capital-protection strategy, it is a long-term strategy with the potential for wealth-building. The point is to ride out the cycles in an effort to end up with more wealth at the end of relatively long periods of time (at least a decade or more)."

The Green Century Balanced Fund also includes a fixed income portfolio. Why? "Precisely for times like these. While many corporate bonds (especially in the Financial sector) are falling in value in this bear market along with stocks, they tend to be less volatile over time. I expect bonds may return 5 to 6% in the long run, and cash 3 to 4%."

As you may know, the Green Century Equity Fund tracks the Domini 400 Social Index (the "Index"). KLD Research & Analytics, Inc. (KLD), the firm that created and maintains the Index, closely monitors corporate activity and makes changes to the Index after carefully weighing a company’s track record on social and environmental performance as well as its financial viability. The Green Century Equity Fund continues to be the only mutual fund that provides an opportunity to invest in the oldest and most widely known socially responsible investment index.

Triggered by the deteriorating financial quality of Fannie Mae and Freddie Mac, KLD replaced these companies in the Index with two forward-thinking companies, Forest City Enterprises, Inc.¹ and Brookfield Properties Corporation¹. These two companies are both helping to build a more sustainable economy. Forest City has received many awards for its developments in the areas of design, landscaping, sustainability, education, tenant satisfaction, and community economic development. Led by a Director of Sustainability Initiatives and a Director of Energy Management, the company has several buildings which are certified to the Leadership in Energy and Environmental Design (LEED) green building standard.

Brookfield Properties also promotes environmental sustainability in its office buildings and developments. As of 2008, the company reported that all new developments would be built in accordance with LEED standards. The company also participates in the Carbon Disclosure Project, which requests the largest 500 global companies to report on their greenhouse gas emissions.

During market downturns, it may be difficult for shareholders to find a silver lining in their investment portfolios. Both the Green Century Balanced Fund and the Green Century Equity Fund have been structured to serve as long-term, core holdings that can anchor most portfolios. As of September 30, 2008, the Green Century Funds have better average annual returns on a year-to-date basis as well as for the one-year period than the S&P 500. In particular, the Green Century Balanced Fund is designed so that its bond portfolio, which represents approximately 40% of the total net assets, could dampen volatility. In a bear market, that means the Fund could lose less of its value than all-equity portfolios.

As of September 30, 2008, the calendar year to date return for the Green Century Balanced Fund was -12.77% versus -14.15% for the Lipper Balanced Fund Index.² As of September 30, 2008, the calendar year to date return for the Green Century Equity Fund was -17.73% versus -19.29% for the S&P 500® Index.³*

                AVERAGE ANNUAL RETURN*
 
Green Century Balanced Fund
Total expense ratio: 1.38%
September 30, 2008     
                             One Year   Five Years   Ten Years      
Green Century Balanced Fund    -13.75%    1.56%       7.29%
Lipper Balanced Fund Index     -15.11%    4.78%       4.20%

               AVERAGE ANNUAL RETURN*
 
Green Century Equity Fund
Total expense ratio: 0.95%	                              
September 30, 2008     
                            One Year   Five Years    Ten Years
Green Century Equity Fund    -20.55%      3.00%       1.49%
S&P 500® Index               -21.98%	  5.17%       3.06%

* The performance data quoted represents past performance and is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain Fund prices and performance information as of the most recent month-end, call 1-800-93-GREEN. Performance shown does not reflect the deduction of taxes that a shareholder might pay on Fund distributions or the redemption of Fund shares.

At Green Century, we are not able to predict the future. But we try to prepare for it. By staying the course, investing for the long-term, searching for solid green holdings, and engaging with companies to improve their environmental performance we hope to weather the storm knowing that we continue to contribute to building a sustainable economy.

If you have any questions, please do not hesitate to contact us at 1-800-93-GREEN or visit us on-line at: www.GreenCentury.com.

Thank you,

Green Century Capital Management

You should consider the Funds' investment objectives, risks, charges and expenses carefully before investing. For a prospectus that contains this and other information about the Funds, call 1-800-93-GREEN, email info@greencentury, or visit www.greencentury.com/invest/documents. Please read the prospectus carefully before investing.

Distributor: UMB Distribution Services, LLC 10/08

¹ As of September 30, 2008, Fannie Mae comprised 2.32%, Freddie Mac comprised 2.65% American General Financial Corporation comprised 0.46%, Lehman Brothers Holdings comprised 0.10%, American Internatinal Group comprised 0.00%, Barclays PLC comprised 0.25%, Bank of America Corporation comprised 0.94%, Goldman Sachs Group, Inc. comprised 0.64%, and JPMorgan Chase & Company comprised 0.76% of the Green Century Balanced Fund.  As of September 30, 2008, Fannie Mae comprised 0.00%, Freddie Mac comprised 0.00%, Forest City Enterprises, Inc. comprised 0.04%, and Brookfield Properties Corporation comprised 0.06% of the Green Century Equity Fund.  Portfolio composition will change due to ongoing management of the Funds. References to specific investments should not be construed as a recommendation of the securities by the Funds, their administrator, or their distributor.

² Lipper Analytical Services, Inc. (“Lipper”) is a respected mutual fund reporting service. The Lipper Balanced Fund Index includes the 30 largest funds whose primary objective is to conserve principal by maintaining at all times a balanced portfolio of both stocks and bonds. Typically the stock/bond ratio ranges around 60%/40%. It is not possible to invest directly in the Lipper Balanced Bond Fund Index.

³ The S&P 500® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The S&P 500® Index is heavily weighted toward stocks with large market capitalization and represents approximately two-thirds of the total market value of all domestic stocks. It is not possible to invest directly in the S&P 500® Index.