Invest based on your values.
When creating an investing plan, many investors are interested in investing according to their values -- at least with some portion of a portfolio. Including sustainable investments in your portfolio can help you make money while still potentially encouraging more sustainable practices among companies. But where do you find these sustainable investments? If you're hoping to get access to socially responsible investing choices, here are a few places to start.
Betterment is a well-known robo advisor. Interestingly, though, you aren't limited only to what's chosen for you from a group of generic exchange-traded funds, or ETFs. You can choose the SRI option, which will replace some of your asset classes with a socially responsible alternative. However, with this option, you still aren't choosing your own sustainable investments. On top of that, your entire Betterment portfolio won't be socially responsible. Instead, Betterment will determine which of your asset classes has a low-cost SRI alternative and go with that.
With Motif, the idea is that you can invest in theme portfolios. It's possible to assemble your own portfolio, or you can invest in pre-created portfolios. Motif offers its impact categories that include socially responsible themes. For example, one of the impact categories is a sustainable planet, which looks at a company's carbon footprint. With a Motif based on this area, you'll find portfolios containing companies with low carbon footprints and practices that make for a more sustainable environment.
This is an investment platform that helps you create a portfolio based around the idea of sustainability. With the help of low-cost ETFs, this platform helps you identify sustainable investments that you can add to a portfolio based on your risk tolerance and wealth-building goals. It's important to note, however, that your holdings are kept with Charles Schwab. You can use this platform to easily find sustainable investments, though, and make decisions based on your notions of socially responsible investing.
EarthFolio is another investment platform that focuses on SRI as part of its mission. It's kind of like a robo advisor for sustainable investing. You answer questions about your investing goals, but also about your own sustainability goals. Investments are managed by Blue Marble Investments, which is a registered investment advisor, and funds are held by TD Ameritrade. The fee is a little bit higher than what you'd see with other robo advisors, but still much lower than what you might end up paying if you decided to invest in an SRI mutual fund on your own.
With Aspiration, you can choose from a variety of products and services that are designed to do social good. Their Redwood Fund focuses on fossil fuel-free investing and other sustainable practices. In addition to offering sustainable investing, it's also possible to use banking products. Aspiration also donates a portion of what it receives in fees to charitable causes, making it a solid choice for those who want a money management experience that aligns with their values.
You can also check with your current broker to see if they offer sustainable investments. For example, Fidelity offers its own sustainability index fund, as well as access to other mutual funds and ETFs through its platform. If you already have a broker that you're happy with, you might not want to move some of your money elsewhere. Some brokers are adding sustainability and SRI to their stock screeners. You can also look for "ESG" (environmental, social, governance) on a stock screener to find investments that might meet your needs.
How to decide
Deciding where to put your money depends on what you hope to accomplish and how involved you want to be. If you want to build your own portfolio, sticking with a broker and choosing your own funds or individual companies can make sense. On the other hand, if you want to invest in a way that's hassle-free, it might make more sense to turn it over to someone else. There are plenty of robo advisors willing to manage your portfolio for you -- it just requires a little more trust. As always, though, it's important to remember that returns aren't guaranteed and that you might have to make trade-offs to invest sustainably. Carefully consider your own investing goals and values.
6 places to find sustainable investments:
-- Your Broker
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