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Is there a trade-off between impact investing and earning significant gains?

I am a very socially conscious individual and would like to invest in a manner that will benefit society. However, I am concerned that impact investing would exclude me from some prime investments that would grow my portfolio. Is this a trade-off I have to come to terms with? Can I still earn significant gains through impact investing?

Investing, Asset Allocation
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February 2017

Good question. There will always be a trade off when you have restrictions on what you can and cannot invest in. But it is not like it used to be. There are many good options out there now. Here is a good website to start looking at:

http://www.ussif.org/sribasics

I have put together portfolios for those with socially conscious restrictions and I hate to say it, but the historical risk/return profile is never as attractive. That being said, you can still do a very good job building and preserving wealth and still sticking to your values.

One option is to define what you are opposed to and then looks at funds that are not labeled as SRI or ESG funds and drill down into the holdings and philosophy. If you are working with an advisor, they can do the legwork.

I created my own firm because of the values of the traditional finance world, so I applaud you.

Good Luck!

Mark Struthers CFA, CFP®

October 2018
October 2018