Socially Responsible Investing
Would you like your investments to reflect your belief about the importance of contributing to social good and environmental protection? Thankfully, that’s what socially responsible investing (SRI) is all about.
SRI has become increasingly popular over the recent years, and you may see it referred to as environmental, social and governance (ESG) investing, values-based investing, ethical investing, or sustainable investing. The financial industry has introduced literally hundreds of these SRI mutual funds and ETFs. These SRI funds invest in companies with a proven commitment to:
- Protecting the environment
- Treating employees fairly
- Demonstrating corporate accountability
Sector-screening funds don’t invest in certain industries like fossil fuels, tobacco, alcohol and gambling. And impact investing funds allow investors to focus their money on certain sectors, like renewable energy and biotech.
Deciding which SRI fund makes sense can be overwhelming, especially when you try to factor in the potential impact of SRI on your investment returns and still achieve a diversified portfolio. This is where an objective, experienced financial advisor can help.
Key socially responsible investing questions a financial advisor can answer
- How can I exclude companies in sectors I oppose from my portfolio?
- Is it better to invest in individual companies that reflect my values instead of an SRI fund or ETF?
- How do I find an ESG fund that aligns with my ethical investing values?
- What are the risks of choosing SRI funds?
- Do SRI funds have higher fees than normal funds?
SRI Challenges
How a financial advisor in the Wealthramp network can address your socially responsible investing challenges
Serving as your trusted advocate, your financial advisor in the Wealthramp network works directly for you. They’ll assess the potential impact of adopting a socially responsible investing strategy on your long-term investment returns.
If you then transition to an SRI portfolio, your financial advisor can:
Work with a professional to build a socially responsible investment portfolio
The biggest socially responsible investing mistakes investors make
Failing to evaluate the potential impact of socially responsible investing on your investment returns
Investing in ESG funds without fully researching the evaluation criteria
Choosing more expensive, actively managed SRI funds when lower-cost index fund and ETF alternatives are available
Having too many SRI assets concentrated in certain sectors like technology and renewable energy