Betterment, a smart money manager, announced new Socially Responsible Investment (SRI) portfolio offerings that will allow customers to invest for environmental and social impact, without sacrificing the portfolio diversification, tax-optimization or performance that Betterment strives to deliver. The existing SRI offering, first made available in 2017, is receiving a number of enhancements, and will now be known as the Broad Impact portfolio. The company is also offering two new portfolios, Social Impact and Climate Impact. The offerings will also be available to Betterment for Business and Betterment for Advisors customers.
The new Climate Impact portfolio is designed with a particular focus on mitigating climate change, featuring three distinct global allocations: First, towards companies with the lowest carbon footprints within every sector. Second, towards funds which specifically exclude companies holding fossil fuel reserves. Third, towards “green bonds”, which fund environmentally beneficial projects across the world, including alternative energy, pollution control, and climate adaptation.
“Energy and urgency around values-driven investment continues to grow, and we can no longer assume which causes matter most to our customers,” said Boris Khentov, SVP, Operations & Legal Counsel at Betterment. “We set out to do better for them, and that means continuing to evolve our Broad Impact approach, but also increase options, through customization. Investors shouldn’t have to guess whether their investments are maximizing the impact they value most, and they shouldn’t have to to choose between social good and lower costs: they deserve a values-based portfolio which is both built on a low-cost, diversified investment strategy, and which reflects their personal values.”
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The new Social Impact portfolio builds on Betterment’s Broad Impact portfolio with an additional focus on U.S. companies that value diversity, including both the NACP ETF, designed to provide exposure to U.S. organizations with stronger racial and ethnic diversity policies, based on criteria developed by the NAACP, and the SHE ETF, which provides exposure to U.S. companies that demonstrate greater gender diversity within senior leadership.
“We applaud Betterment for recognizing the current state of values-based investing lacks a specific focus on minority empowerment, and for taking the lead to address that,” said Yumeka Rushing, Chief Strategy Officer at the NAACP. “We believe this will be a catalytic investment in the fund that will help us further engage with major U.S. corporations and evolve their relationships with communities of color.”
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