Socially responsible investing, or SRI, means investing in companies that adhere to certain socially conscious business practices, with the purpose of making a positive impact or eliminating a negative impact.
What does an SRI Portfolio look like?
SRI has many names, including ESG investing, which stands for Environmental, Social, and Governance. SRI and ESG allow us to invest in companies that produce green energy or eliminate companies that contribute to greenhouse gas emissions. It also allows us to eliminate “sin stocks” such as alcohol, tobacco, and adult entertainment companies from a portfolio.
Essentially, SRI and ESG portfolios make it possible to invest in a way that aligns with our values, whatever those may be.
What are the benefits of SRI?
In an era where we want everything customized to our tastes and values, our investment portfolios should be no different. While in the past, SRI used to mean potentially giving up investment return in exchange for investing "responsibly," that’s no longer the case.
According to a 2019 Morgan Stanley study, “there is no financial trade-off in the returns of sustainable funds compared to traditional funds, and they demonstrate lower downside risk.” The study also found that during a period of extreme volatility, there is “strong statistical evidence that sustainable funds are more stable.”
In short, Socially Responsible Investing allows investors to create highly customized portfolios that are aligned with their values and interests, without the fear of missing out on potential investment returns.
How do I take advantage of SRI?
With the rise in popularity of socially conscious investments, SRI-ESG ETFs and mutual funds are much more accessible, but building an investment portfolio on your own can be daunting.
At Meyer Wealth Advisors we specialize in creating customized financial plans – that includes creating an SRI portfolio that’s tailored to your values. Schedule a call below or email us at firstname.lastname@example.org to learn how we can create your customized SRI portfolio.