Socially Responsible and ESG Investing the Adviser Investments Way
Socially Responsible Investing (SRI)—aligning a portfolio with one’s values—has been practiced for decades, but has burst into the mainstream under a new moniker: “ESG,” or Environmental, Social and Governance investments. Adviser Investments is pleased to introduce two distinct ESG strategies.
At its core, ESG investing distinguishes between companies that score well on a host of issues related to environmental, social and corporate governance criteria, and those that don’t. Investors pursuing ESG strategies may favor companies that provide services and products they believe achieve social good, while avoiding companies they perceive to be detrimental to society. For instance, alcohol, tobacco, gambling and weapons companies are often omitted from ESG portfolios.
As you might expect, there are many measures used to determine how well companies score on an ESG scale. Some ESG strategies are geared toward being consistent with religious beliefs, while others may focus on niche industries such as renewable energy, or companies with low carbon footprints. Whatever the criteria used to build an SRI or ESG portfolio, the goal is one and the same: To do well while doing good.
Translated into investment language, this means earning a reasonable return while investing in companies that help improve the world in which we live.
Introducing the Adviser Investments ESG Strategies
We have developed a pair of discrete ESG investment strategies for those wishing to pursue an ESG mandate:
Our ESG CORE portfolios are designed as a comprehensive, diversified choice for those who want an ESG focused investment strategy. We implement our Active Acumen™ investment strategy by investing primarily in exchange-traded funds (ETFs) and mutual funds to build globally diversified portfolios that meet well-defined ESG metrics. We tailor these portfolios for a range of growth and income objectives and risk comfort zones.
The ESG DIVIDEND INCOME STOCK portfolio invests in large U.S. companies with a history of paying and growing dividends over time. This stock-only strategy is designed to be a component of a diversified core portfolio. Our in-house Dividend Income Team applies the same stock selection approach it has for years on other portfolios, but excludes stocks that don’t meet our clear-cut ESG criteria.
Adviser Investments ESG Core Portfolios Are Distinctly Different
Since our founding in 1994, the Adviser Investments team has focused on identifying talented active investment managers. Through our Active Acumen analysis, our ESG Core portfolios leverage the insights of those active managers in their construction.
For example, if the active managers we hold in our core portfolios are finding opportunities in a particular area of the market, such as mid-cap growth stocks, we can invest in a fund or ETF that targets the same type of companies or sector in our ESG Core strategies. Active Acumen applies the insights of these select active managers to a portfolio that is in line with our clients’ ESG values and goals.
Our investment committee, which oversees every strategy we offer, also actively positions client portfolios based on their assessment of the economic environment and opportunities in the investment markets.
ESG Dividend Income Stock
Our Dividend Income Team takes a two-fold approach to building a portfolio with growth and income potential that fulfills an ESG mandate.
First, we seek to identify stocks issued by high-quality companies that fit a specific dividend-growth profile. Many income-oriented investors focus purely on a stock’s absolute yield. We think yield growth is equally important, so our team looks for stocks that provide both a competitive current yield and the potential for growth in that income stream.
Next, the team puts qualifying dividend-growth stocks through an ESG filter to ensure that only companies that meet the standards established by MSCI or FTSE, two of the most reputable index curators in the industry, are represented in client portfolios.
The result is a concentrated selection of high-quality, dividend-paying stocks that fit with clients’ desire to invest in socially responsible companies.
Learn More About Adviser Investments ESG Portfolios
If you have any questions, or would like to discuss ESG investing, please contact us by email at firstname.lastname@example.org or by phone at (800) 492-6868.
This material is distributed for informational purposes only. The investment ideas and expressions of opinion may contain certain forward-looking statements and should not be viewed as recommendations or personal investment advice, or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed. The ESG Dividend Income strategy is managed by Braver Capital Management, a division of Adviser Investments, LLC. Adviser Investments’ ESG portfolios primarily hold ETFs and mutual funds that carry a label or branding as an ESG or socially responsible investment product (though not all funds and ETFs are labeled as such) or individual securities that meet our ESG criteria. We recommend that clients regularly review proposed and existing portfolio recommendations to ensure that each holding is in line with their expectations.
Our statements and opinions are subject to change without notice and should be considered only as part of a diversified portfo lio. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged.
All investments are subject to risk of loss. Securities held by our ESG Core strategy must be aligned with an environmental, social or governance (ESG) objective based on our judgment and review. Not all securities will necessarily be expressly branded or marked as ESG or similar by the mutual fund or ETF sponsor. Securities that do not meet our ESG criteria will not be included in these accounts.
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