Socially responsible investing made easy.
Opinionated consumers are often told to “vote with their wallet”; now socially conscious investors can vote with theirs, too, thanks to socially responsible investing. But researching investments is tiresome enough without having to add the additional element of social responsibility to your criteria. Luckily, AI is here to help. The following are seven of the best robo advisors for socially responsible investing to make investing according to your values as easy as opting for the cage-free eggs.
Invest in or divest from all the causes that matter to you with OpenInvest. The socially responsible robo advisor integrates “all of your values to create a portfolio that represents the whole you.” Causes include divesting from carbon or deforestation, and investing in LGBTQ or women’s advocacy. There’s even a Stand Up to Donald Trump portfolio. “Because the underlying holdings are stocks and not funds, investors can vote their proxies on their phone with a simple swipe,” says Kate Starr, chief investment officer of Flat World Partners. “The app even provides guidance on votes relating to sustainability issues to ensure investors have the necessary information to vote in line with their values.”
Account minimum: $3,000
Management fee: 0.5 percent
If having a vote is important to you, another great socially responsible robo advisor is Swell. Like OpenInvest, Swell builds portfolios of individual companies. Rather than using a benchmark and weeding out the bad, Swell does the heavy lifting for you by finding high-growth, impact companies. “It’s clear they’ve done a lot of research with their end investor in mind,” says Aniket Shah, head of sustainable investing at OppenheimerFunds. Not only do they provide a unique level of customization (investors can remove up to three holdings from their portfolio), but they’ve also linked investments to the U.N.’s 17 Sustainable Development Goals, “a powerful framing tool,” Shah says. Doing so helps their companies score well on ESG concerns, too.
Account minimum: $50
Management fee: 0.75 percent
Speaking of ESG investing, EarthFolio actively incorporates ESG screening into its investment selection process. It screens mutual funds for 10 environmental, social and governance criteria such as clean tech and animal welfare. After a short questionnaire about your goals, situation and risk tolerance, the sustainable investing robo advisor will create a portfolio to align with your investment needs and values. It will also give you a 15-year back-tested performance analysis of your ESG portfolio and compare it to your current portfolio. The $25,000 required to open or maintain an account may seem steep, but if your average daily balance falls below $25,000 in any quarter, EarthFolio will charge a flat fee of $31.25 instead of the annual 0.5 percent annual management fee.
Account minimum: $25,000
Management fee: 0.5 percent (or $31.25 flat fee if average daily balance falls below $25,000)
In addition to thematic portfolios and IPOs (with cryptoassets coming soon), Motif provides impact investing portfolios built around promoting a sustainable planet, fair labor or good corporate behavior. It removes companies that don’t meet your chosen goal and adds industry leaders that do. Portfolios include individual stocks and bond ETFs across the U.S., international and emerging markets. It’ll give you a free portfolio recommendation based on your chosen cause, investment goal, age and risk tolerance in two minutes flat — and you don’t even have to tell it your name.
Account minimum: $1,000
Management fee: 0.25 percent
Hailing from our northern neighbors, Wealthsimple entered the U.S. market after becoming one of Canada’s largest robo advisors. It uses global ETFs to build diversified portfolios for passive investors. Socially responsible portfolios follow the same methodology as its traditional portfolios (modern portfolio theory and diversification through passive ETFs) while using ETFs that are weighted according to their environmental and social impact in addition to performance. SRI portfolios focus on companies promoting socially responsible initiatives like low carbon emissions, gender diversity or affordable housing. The robo advisor also offers an halal investing portfolio for investors who want to follow Islamic investing principles.
Account minimum: None (Basic) or $100,000 (Black)
Management fee: 0.5 percent (Basic) or 0.4 percent (Black)
Ellevest lets you invest up to half of your portfolio in one or more of five Impact Portfolios for access to companies that “power positive social change by advancing women.” Why only half your portfolio? Because the company says there aren’t enough impact investments to meet their fiduciary responsibility if you invest any more. Impact portfolios include funds of companies with women leadership or policies for female advancement, sustainable and ethical companies, and companies helping finance women-owned business or those that provide community services like child education. Each fund is diversified across up to 21 global asset classes. And while the company emphasizes women investors, men are welcome, too.
Account minimum: Zero for Digital or $50,000 for Premium
Management fee: 0.25 percent (Digital) or 0.50 percent (Premium)
Socially responsible investors should not have to choose between low-cost and values-based investing, according to Betterment. Which is why the nation’s largest robo advisor created a socially responsible investing portfolio. As with all of their portfolios, the SRI option strives for diversification, tax optimization and cost control. It does this by taking their core portfolio and replacing the U.S. large-cap and emerging market stock components with socially responsible alternatives. “An acceptable alternative” to the asset classes beyond U.S. large-cap and EM in their core portfolio doesn’t yet exist, the robo advisor says. The SRI Portfolio may exclude “bad guys” – like Exxon Mobil Corp. (ticker: XOM) or Walmart (WMT) – and emphasize “good guys” – like Microsoft Corp. (MSFT) and Walt Disney Co. (DIS).
Account minimum: Zero (Digital) or $100,000 (Premium)
Management fee: 0.25 percent (Digital) or 0.4 percent (Premium)
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7 Robo Advisors for Socially Responsible Investors originally appeared on usnews.com