Beth Wahlig, Director of SRI, will be hosting a webinar on Socially Responsible Investing on Wednesday, January 27th at 7:oo – 8:oo pm. Email Beth at bpwahlig@mraadv.com to RSVP and receive the Zoom link.
Many people see the world differently and want to take a more personalized approach in managing their money. They see money as a tool to further their lifestyle choices and their beliefs in fostering ways to improve their world, communities, cultures, and societies. Many tend to care deeply about others, particularly those who are most vulnerable like immigrants coming from war torn countries. Some are very concerned about the effect of climate change on the earth’s scare resources. Many surveys show that women and millennials want social and environmental returns in addition to financial returns in their investment portfolios. This can mean investing in ways to improve our environment, to promote diversity and inclusion of minorities in organizations, to provide clean water, to cut down on carbon output, or to discover new healthcare products that can enhance human life.
Many individuals are looking at Socially Responsible Investing as a tool to invest for both societal impact and returns. Social investing is focused on making investments in areas where money can have positive impact. The impact of making a difference in moving towards a more progressive sustainable world. This approach uses a set of criteria developed by the United Nations’ Sustainable Development Program.
The UN Agenda focuses on 17 Goals to Transform Our World.
United Nation’s “Sustainable Development Goals are a call for action by all countries – poor, rich and middle-income – to promote prosperity while protecting the planet. They recognize that ending poverty must go hand-in-hand with strategies that build economic growth and address a range of social needs including education, health, social protection, and job opportunities, while tackling climate change and environmental protection.”[1]
Looking at the UN goals, MRA Advisory Group put together a Socially Responsible Investment Strategy to include investments in companies that are concerned about their responsibilities towards meeting more sustainable goals and making this world a better place. We have constructed investment portfolios that look at the equity and fixed income markets and incorporate ETFs and mutual funds that meet the criteria of Environmental, Social & Governance Investing (ESG). This type of investing evaluates corporate behavior in determining the future financial performance of companies.
Thematic portfolios are focused on issues such as the environment & climate change, renewable energy, cancer fighting drugs, new vaccines, reducing carbon pollution, access to clean water, income inequality, affordable housing, women in senior management, equal pay, reducing plastic consumption and other societal concerns.
MRA Advisory Group’s Investment Process
The investment strategy has three components. First, MRA Advisory Group determines the proper asset allocation or the mix between investments in cash, equities, bonds, and alternative investments. Once this is done, the firm selects specific mutual funds and ETFs which are focused in the sustainable or ESG investing universe.
For example, an individual can invest in general socially responsible funds such as iShares MSCI KLD 400 Social ETF (DSI) or Vanguard FTSE Social Index (VFTSX) which look at specific Environmental, Social and Governance issues and invest in specific companies on how they rate in each category.
MRA Advisory Group also incorporates Gender Lens Investing. This social investing approach is focused on companies who promote gender equality and provide a positive working environment for women. Clients can buy SPDR® SSGA Gender Diversity Index ETF (SHE) offered by State Street. This ETF seeks to provide exposure to U.S. companies that demonstrate greater diversity within senior leadership than other firms in their industry sector. Other thematic specific investments such as water resources, fossil free reserves, carbon reduction, new pharmaceutical discoveries are incorporated through the selection process.
Why consider socially responsible investing? It is now a strong viable market of finance with over $12 trillion invested at the start of 2018. It is about pushing for progress in the world we live in. A leading investment firm and ETF manager, Blackrock defines it succinctly.
“Sustainable investing is about investing in progress and recognizing that companies solving the world’s biggest challenges can be best positioned to grow. It is about pioneering better ways of doing business and creating the momentum to encourage more and more people to opt into the future we’re working to create.”[2]
Socially responsible investing is an opportunity to build a sustainable future!
This material is not intended to be relied upon as investment advice and is not a recommendation. Speak with your financial advisor about the SRI opportunities available to you. Written by Beth Wahlig, Director of Socially Responsible Investing at MRA Advisory Group in Parsippany, NJ.
[1] United Nations “The Sustainable Development Goals Report 2019”. June 28, 2019. Web PDF file. Available: http://www.sdgindex.org
[2] Blackrock, Inc. 2020. Available: https://www.blackrock.com/us/individual/investment-ideas/sustainable-investing