Q. Please give your opinion of United Technologies Corp, whose shares have been recommended.A. Investing in any conglomerate requires that an investor do some homework to fully understand it. There are many facets to diversified companies, with business units often being added or sold off.This conglomerate is playing it cool in 2011: Its Carrier air conditioners are experiencing strong worldwide sales, especially in China. Its Otis Elevators unit should similarly benefit from that emerging nation’s building activity.Its Pratt & Whitney jet engine business is a solid performer featuring new models with improved fuel economy and reduced noise, while its Sikorsky unit is the world’s largest manufacturer of helicopters.United Technologies has had some high visibility this year:Two of its Black Hawk “stealth” helicopters, modified to reduce noise and evade radar, carried US Navy Seals on their mission to Osama Bin Laden’s compound. The commandos blew up one of the helicopters after it was damaged in a hard landing.This builder of rocket engines testified before Congress that NASA’s continued uncertainty about the future of the space programme is making it impossible for contractors to develop viable strategies for the future.United Technologies shares are up 12 percent this year following gains of 13 percent in both 2010 and 2009. Its first-quarter net rose 17 percent to $1.01 billion.In its April announcement of a quarterly dividend increase to 48 cents a share from 42.5 cents, it expressed confidence that its technologies and emerging-market positions “will provide sustainable sales and earnings growth over the long-term”.Wall Street analysts have been raising price targets for United Technologies over the past month and their consensus recommendation is “buy”, according to Thomson Reuters, consisting of seven “strong buys”, nine “buys” and five “holds”.United Technologies has an order backlog, and the current strength of the euro is a positive for overseas sales. The company purchased General Electric’s security unit last year and more acquisitions may be ahead.Some concerns: Its significant international business must always cope with currency volatility. It is also dependent on government funding for military contracts, and the building and aerospace businesses are cyclical.Earnings are expected to increase 14 percent in 2011 compared to 27 percent forecast for the diversified industrials sector, according to Thomson Reuters. The five-year annualised growth rate is forecast as 10 percent versus 16 percent expected industry-wide.Q. Please tell me what you think of the Appleseed Fund. I like its socially responsible philosophy.A. Socially responsible funds vary greatly in what they consider important.Find out the underlying philosophy of any fund you’re thinking of investing in and examine the individual companies in its portfolio. Its investment strategy and actual performance record should be your final determinants.The philosophy of the Appleseed Fund is sustainable investing, which it defines as companies that “balance the generation of profits with an awareness of their impact on the environment and society,” and whose managers create long-term, enduring value.Not every company measures up, and its concentrated portfolio typically has just 15 to 20 stock names of large-, mid- and micro-cap sizes. It has a substantial portion of assets in cash and in physical gold exchange-traded funds based on concerns about inflation and federal debt.The $178 million Appleseed Fund has a three-year annualised return of 14 percent that places it at the very top of the mid-cap value category. However, due in part to that large cash component, its 12-month return of 12 percent ranks near the bottom of its peers.“The Appleseed Fund is attractive to true value investors because it is driven by strong investment merits,” said Kathryn Young, mutual fund analyst with Morningstar Inc. in Chicago. “It isn’t a core holding because it is so concentrated, but could be a good supplemental holding.”After firms pass its ethical screenings, its experienced management team looks for stocks with strong balance sheets and good returns on capital. It will invest in turnaround plays but prefers limited downside. Four of its five managers must approve any stock before it is added to the portfolio.Health care and consumer goods are the Appleseed Fund’s largest concentrations. Top holdings recently included Novartis AG, Pfizer Inc, SPDR Gold Shares, John B Sanfilippo & Son Inc, Willis Group Holdings plc, Nabors Industries Ltd, PICO Holdings Inc, Johnson & Johnson and Sealed Air Corp.This “no-load” (no sales charge) fund requires a $2,500 minimum initial investment and has an annual expense ratio of 1.24 percent.Q. What does it mean when a mutual fund says that it hedges its currencies? Does this really help a fund’s performance?A. Currency hedging is an inexact science that can nonetheless make a difference. Find out whether a mutual fund does or does not hedge so that at least you understand what’s behind its results.When you have a fund that owns investments in companies outside the US, profits they make are in foreign currencies. This must be converted to dollars because US-based funds are denominated in dollars.“Some mutual funds buy options and derivatives which essentially serve as insurance policies so the value remains constant in the fund, regardless of what happens in actual dollar market fluctuations,” explained Adam Bold, CEO of The Mutual Fund Store in Overland Park, Kan. “Some funds hedge like this all the time, while others do it only when they expect a weak dollar.”When the dollar is falling, the hedge is valuable because you are getting more dollars than the foreign currency, he explained. In periods when the dollar is rising, it is the opposite, and the fund will have paid for insurance that it didn’t really use, he said.“Hedging has to be done right to pay off,” Bold summarised.Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, 555 N. Central Ave., Suite 302, Phoenix, Ariz. 85004-1248, or by e-mail at andrewinv[AT]aol.com (C) 2011 TRIBUNE MEDIA SERVICES INC.