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Socially Responsible Investments: What does it mean?

May 26, 2020
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There’s a trend that’s becoming more main stream and as a result we are seeing changes in investor behavior. It’s called socially responsible investing. So, what exactly is socially responsible investing? Well, you might find your answer from a Millennial. Millennials happen to be the generation that’s fronting this growing movement. Socially responsible investing seeks to achieve financial return while also making a positive impact on the world. This impact can be seen through the environment, social agendas, and/or governance practices. In a recent TD Ameritrade survey, 67% of Millennials said they would put making an impact ahead of making money.

However, this trend doesn’t stop with Millennials only. A recent poll by Morningstar revealed that 72% of all investors are interested in investing in environmental, social, and governance (ESG) based funds. It now appears that all generations are interested in investments that promote making the world a better place, they just have different ideas on how that looks. For example, baby boomers are more interested in diversity and religion versus their millennial counterparts who tend to favor environmental and human rights.

As a result of this concern for socially responsible investments, investors are starting to change the way investments are viewed by funds. No longer is the idea to simply put your money in whatever investments yield the most return on a risk adjusted basis, people now want to make an impact with the money they’re putting to use. Currently however, only 12% of U.S. investors own ESG funds. That number is believed to grow by 58% over the next 5 years.

If you are interested in learning more about these types of investments and how they can fit into your portfolio, don’t hesitate to reach out!

 

 

Steven Dengler, CFP®

Financial Advisor / Director of Planning

 

 

Sources:

https://www.cnbc.com/2019/04/22/socially-responsible-investing-is-not-exclusive-domain-of-millennials.html

https://www.investopedia.com/terms/s/sri.asp

https://www.ey.com/Publication/vwLUAssets/ey-sustainable-investing-the-millennial-investor-gl/$FILE/ey-sustainable-investing-the-millennial-investor.pdf

https://www.barrons.com/articles/q-a-with-andrew-lee-ubss-top-strategist-for-sustainable-and-impact-investing-51561159888?mod=past_editions

 

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Mosaic Asset Partners, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. Comments concerning the past performance are not intended to be forward looking and should not be viewed as an indication of future results.