Welcome to part 2 of 4 in our investment update series. We will be discussing one aspect of LifeGuide’s first investment principle: “Match investments with clearly defined goals and values.” Today’s focus will be on matching your investments with your values.
Investing with Impact
Socially Responsible Investing (SRI), Double Bottom Line Investing, Impact Investing, Responsible Investing, Biblically Responsible Investing and Values-Based Investing are all terms that refer to investment strategies which are concerned with financial outcomes AND how these outcomes are earned.
At its core, this type of investing provides investors with the opportunity to gain a return while not profiting from a certain set of business activities such as adult entertainment, gaming, human rights violations, and tobacco manufacturing (among others). Investing with impact can also involve investing in capital solutions that make a positive societal impact by making investments in affordable housing, economic development, renewable energy, natural resources and the like.
LifeGuide’s Implementation of Investing with Impact
We consider investing with impact to be one of our core competencies here at LifeGuide. We have been offering this type of investing for many years – even before it became popular. Currently we offer access to this type of strategy through our IMPACT portfolios. Our IMPACT portfolios utilize mutual funds that adhere to a double-bottom line investment management philosophy (seeking to provide competitive returns AND positive societal impact). As part of our ongoing effort to ensure that we are using the best approach and funds to accomplish your investment goals, our Solutions Team, led by Zak Lutz, continually researches and evaluates options to enhance our portfolios.
LifeGuide’s Recent Impact Portfolio Enhancements
Recently, we replaced the PAX world international fund with TIAA-CREF’s International Social Choice Fund (TSONX). This decision was made because the TIAA fund is less expensive, and it tries to replicate a non-socially responsible index (SRI). By benchmarking itself against a non-SRI index, a fund has a better chance of not underperforming the broad market because of SRI screening. While investing for impact does present additional challenges for investment managers, we reject the premise that investors must sacrifice long-term performance to invest with impact. Click here for some additional analysis on impact investing and performance.
We have also added Calvert’s Emerging Market Fund (CVMIX). Gaining exposure to emerging markets is a welcome addition due to the relatively sparse selection of emerging market funds that meet our impact portfolio requirements. We continue to hold the Calvert International Small Cap Fund (COIIX) in order to provide an overall small cap tilt to the portfolio.
If you would like additional information about investing for impact, click here for a brief video that discusses the investment strategy of one holding within our IMPACT portfolio.
The above discussion relates specifically to the IMPACT versions of our portfolios. In the coming weeks, we will be sharing updates that we have made to our other portfolio models. If you have questions or are unsure about which LifeGuide portfolio you currently have, don’t hesitate to contact us.
LifeGuide Financial Advisors, LLC is a registered investment advisor. Information about funds is for general information. Nothing in this post should be considered specific investment advice. Asset allocation may vary by the client and depends on objectives and tolerance for risk. Funds, like any other type of security, may be subject to the volatility of financial markets and additional risks associated with investing in fund securities. Please see the prospectus for the mentioned funds for further information and other risk considerations. Upon request, LifeGuide will assist clients and prospective clients in obtaining fund prospectuses.