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Impact Investing and Values-Based Investing

Picture of Scott Hohman, CFP®, AIF®

Scott Hohman, CFP®, AIF®

Opportunities to Align Your Money with Your Values

In this fifth installment in our Investment Strategy Series, I’m pleased to talk about an area of investing that has been growing in leaps and bounds in recent years: impact investing and values-based investing. Resolute’s enhanced investing strategy includes a valuable opportunity for our clients to align their portfolios with their personal convictions – and it’s an easier process than you might think.

If you need to get caught up on this article series and the other elements of our enhanced investing strategy, you can do so here:

Now, let’s get into today’s topic.

There’s a growing trend among individual investors to use their money to create positive change in the world in areas that they find meaningful. For these investors, gone are the days of simply calculating which funds will generate the greatest returns. Instead, impact investors choose where to put their assets based upon their values and convictions, while earning returns in the process, too.

Now, the nuts and bolts of impact investing and values-based investing can seem a bit complex. Though there are some tools available, it can be difficult for investors to make sense of the influx of information about a company’s, say, commitment to reduce fossil fuel use or steps it’s taken toward greater gender equity in the C-suite.

Luckily, Resolute’s clients have access to a user-friendly tool to help them invest in the greater good.

SEE ALSO: Two Emotional Biases That Could Sabotage Your Retirement

Impact Screens

Our impact investing and values-based investing clients utilize Impact Screens to match their values with their investments by being able to select from a list of personal conviction screens. The selected criteria are then applied to their individual stock holdings to exclude companies that aren’t in alignment with their beliefs. Many of our clients choose value investing as a way of connecting their religious beliefs and/or environmental concerns with their investment portfolio. The beauty of this is that you can select from a menu to customize your portfolio.

ESG Portfolios

As part of this enhanced investment strategy offering, our clients can also choose ESG portfolios as standalone portfolios. ESG stands for Environmental, Social, and Governance.  This one-time niche investment strategy has gone mainstream in recent years, and we offer a simple and efficient way for Resolute clients to begin their ESG journey.

Thematic Impact Portfolios

We also offer the opportunity for our clients to invest in Thematic Impact Portfolios. These are ideal options for those who may want to target owning companies that are trying to create positive impacts (instead of simply excluding companies that they feel have a negative impact) on the environment, social, or governance themes that are important to the client.

SEE ALSO: How to Gift Shares of Stock to Charity

A Note on Diversification

It’s important to know that, with each of the above impact investing or values-based investing strategies, we still maintain diversification. We also work closely with portfolio managers to balance client values with existing manager models.

Want to Know More About Impact Investing and Values-Based Investing?

As with each aspect of our enhanced investing strategy, our goal is to help you put more YOU in YOUR portfolio. In this case, we can now better serve our clients who want to use their investment dollars to effect positive change in the world we live in.

If you’re wondering whether impact or values-based investing may be right for you, let’s have a conversation. If you’re an existing Resolute client, please contact your advisor to learn more. And, if you’re not yet a Resolute client, you can schedule an initial discussion to learn more about all of our services. We look forward to hearing from you!

LEARN MORE ABOUT THE RESOLUTE INVESTMENT STRATEGY

The views expressed represent the opinion of Resolute Wealth Advisor, Inc. (RWA). The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While RWA believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the RWA’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.

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