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Saving the planet and your portfolio this Earth day

22 April 2017 in

Personal values are at the center of every conversation in 2017 and economic, social and governance (ESG) investing is becoming some of the hottest tickets in town among investors who want to do more with their money than just banking solid returns. A survey of millennial and high net worth investors found that 56 percent of millennials want to learn more about how they can use positive’ investment strategies to promote their favorite causes.

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Source: Legg Mason

Investing for the Greater Good

In simple terms, a values-based approach to investing is all about choosing your investments based on what matters to you most: anything from the environment to fair labor.

If supporting the environment is a cause that’s near and dear to your heart, investing in companies that are committed to the same values makes sense. For example, you might pick a company that’s making a concerted effort to quell climate change or one whose mission is conserving natural resources. At the same time, you’d want to steer clear of companies that are wreaking havoc on the environment through pollution or habitat destruction.

How You Can Benefit From Investing Based on Your Values

Using your personal ethics as a guide for making investment decisions can have several advantages, starting with your belief of doing some good with the money you’re investing. In backing companies that are focused on minimizing their environmental impact, you can be helping the planet at large.

Another benefit is the potential for higher returns. According to the Report on US Sustainable, Responsible and Impact Investing Trends from US SIF, the value of portfolios that use ESG factors rose by 69 percent in the last two years, reaching over. A report from Barclays suggests that investing with an eye toward values can increase bond returns. Investing with the goal of making a difference for the Earth and the people who live on it can be good for your wallet, as well as your conscience.

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Source: Barclays, October 2016

Adopting a do-gooder investment mindset can also help downplay risk in your portfolio. According to an analysis of 10,228 open-end mutual funds and 2,874 Separately Managed Accounts (SMAs) tracked over a seven-year period since 2016, tended to be less volatile than traditional ones. Less risk in your portfolio can pay off when it’s paired with higher returns, not to mention the warm fuzzy feeling that comes from knowing you’re creating positive change in the world.

Go Green With Motif Impact Portfolios

If you want to invest based on your values but you don’t have time to evaluate individual companies or you’re a newbie investor, Motif’s new Impact Portfolios may be the answer.

At Motif, you can craft your portfolio based on what’s most important to you, including a sustainable planet. In choosing companies to include in your portfolio, that are scored on carbon emissions and product carbon footprint. The companies are scored and rated, allowing you to select the ones that make the cut for your portfolio.

Your money is invested across five different asset classes, in an effort to help diversify across broader areas of the market.

A wide range of industries make up the sustainable planet portfolio. You’ve got the energy, information technology, communications, finance, healthcare and tech sectors just to name a few. While they’re all very different, the common thread among them is a commitment to act in an eco-conscious way.

Establishing Your Motif Impact Portfolio

To get the ball rolling, you’ll need to answer a few quick questions about what your investment goals are, your time horizon and your risk tolerance. From there,  you can view a portfolio of stocks that reflect your values. In short, Motif’s Impact Portfolios can help you create a  simple solution for helping the environment—and your investment outlook—this Earth Day, and beyond.

 

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