Investing with a conscience

One Canadian firm is responding to millennial desires with a socially responsible portfolio

There was a time when most investors simply wanted make more money and secure their financial future. However, in today’s more socially conscious times, investors are increasingly thinking as much about the wider world as they are about themselves.

That’s why Wealthsimple launched its Socially Responsible Investing [SRI] portfolio.

“Recently, the number of Canadians looking to invest in socially responsible portfolios has increased dramatically, and we’re seeing a lot of millennials looking to align their values with their investments,” says Mallory Greene, marketing manager at Wealthsimple. “It’s been highly requested by our clients, and we’re excited to make investing in a socially responsible manner more accessible.”

Simply put, SRI portfolios invest in companies that do business in a socially responsible way. However, because this is an investment and not a charity, performance still matters, so Wealthsimple has aimed to design a portfolio using ETFs that prioritize low carbon emissions, advance cleantech innovation and promote sustainable growth in emerging markets, while at the same time offering diversification and low fees.

The Wealthsimple SRI portfolio will be made up of the following ETFs:

iShares MSCI ACWI Low Carbon Target ETF (CRBN): Global stocks with a lower carbon exposure than the broader market

iShares Jantzi Social Index ETF (XEN): Q&A Canadian stocks, excluding companies with a poor social responsibility record based on broad environmental, social and governance [ESG] criteria

Vident International Equity Fund (VIDI): Developed and emerging economies with sustainable growth, based on criteria such as human rights and low corruption

PowerShares Cleantech Portfolio (PZD): Cleantech innovators in the developed world BMO Mid Federal Bond Index ETF (ZFM): Fixed-income exposure via Canadian government bonds in order to optimize for risk

Greene is confident in the portfolio’s success, pointing out that socially responsible investing has grown tenfold during the last 20 years and that SRI funds now hold $22 trillion in assets worldwide. Indeed, in Canada alone, socially responsible investing accounts for 20% of all financial assets.

“Transparency is a big issue within the financial industry, and I don’t think people know exactly what they’re investing in,” Greene says. “I expect SRI funds to continue to grow in popularity as we increase awareness and education surrounding the topic. We’re all looking for ways to make the world
a bit better, and it’s nice to know that I’m simultaneously making a positive impact and improving my financial well-being.”