This article series, A Whole Lot Modern: Three Investment Pillars to Embrace Now, will focus on: 1) Investments with Impact, 2) Investments with ESG (Environmental, Social, Governance) analysis, and 3) Investments with Impact and ESG. Investors today have a growing interest in aligning their personal values with their financial goals. Such investors embrace portfolios designed not only to help build and preserve their portfolio of assets as they aim to achieve their personal financial goals, but they have another requirement—that the specific investments in which they invest be aligned with their personal values.

From a practical perspective, a primary component of portfolio alignment with values results from mutual fund managers engaging in advocacy. For instance, a company could be a very attractive purchase for a mutual fund manager’s portfolio, but it may be discovered there is little gender or ethnic diversity on the board of the firm. In such a case, the fund manager(s) might actively advocate for board diversity and perhaps delay purchasing the company for their mutual fund until the board was reflective of this engagement.

Another example of reinforcing personal values through investment selection is that an investor with a strong interest in protecting the environment could choose a mutual fund that invests in the construction of solar farms.

One local organization, Sustainable Business Network of Greater Philadelphia, elevates attention to Impact to a high art and best practice. They espouse a triple-bottom-line approach to business dealings: People + Planet + Profits = Good Business.  Regarding member benefits, they offer a retirement plan comprised predominantly of Impact investment choices.

Stay tuned for part two of our series: A Whole Lot Modern: Three Investment Pillars to Embrace Now when we will explore pillar number two: Investments with ESG analysis. We welcome your comments and would love to start a conversation about this vital investment trend! contactus@entrustfinancial.com

Material presented is for illustration purposes only and is not a promise of any particular investment result. The actual investment return and principal value of a mutual fund investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. This material is not to be considered tax, legal or financial advice.