Are your clients passionate about social issues, such as the promotion of women? If so, gender lens and social investing can help them stick to their values and earn returns at the same time.
Companies like U.S. Trust, the private wealth-management arm of Bank of America, are busy unveiling social investment strategies that focuses specifically on investing in companies that support social issues and pro-women policies. This development is part of the company's, and country's, effort to promote socially responsible investing—making financial decisions and choices that are in line with your beliefs and values while also earning good returns.
To date, the U.S. holds approximately $1 billion in socially innovative portfolios. And Jason Baron, architect of the Socially Innovative Investment Portfolio at U.S. Trust, says nearly $2.7 trillion has been committed to socially conscious investing over the past decade, primarily by high-net-worth and major institutional clients.
The philanthropic attitudes of Bill Gates and Warren Buffett have helped boost the trend, pushing investors to consider their portfolios and investment decisions in a new light. Investing isn't about beating the market or competing with your next door neighbour. Rather, it's about aligning your financial goals with your personal goals and values.
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U.S. Trust plans to research companies to determine whether or not they implement gender equity at work and assist female entrepreneurs, for example. It will also look for companies that promote female board members and executives.
"There is incontrovertible evidence that companies with more progressive gender policies outperform those that don't," says Jason Baron, a U.S. Trust executive and architect of the Socially Innovative Investment (SII) Portfolio. He says an increasing number of investors are concerned with gender equality and women's issues, and its his job to match his clients' investment portfolios with their needs and values.
In Canada, RBC says it plans to commit $20 million to new social and environmental initiatives—$10 million will go toward the RBC impact fund, which helps "finance projects by organizations and entrepreneurs tackling social and environmental challenges", while the remaining $10 million will go into Socially Responsible Investment Funds.