We have quietly been managing portfolios for a small number of clients whose desire has been to avoid holding certain types of investments, for years. This investment style is usually referred to as Socially Responsible Investing or “SRI”. It considers not only the financial return but also what ethical impact the investments might have.
SRI encourages equitable corporate governance and management practices, environmental stewardship, consumer protection, human rights, and diversity. Holdings that would generally be avoided include gun stocks, alcohol, tobacco, weapon manufacturers, etc.
Being a numbers person, I have usually avoided using SRI in the past because it seems to have delivered lower returns. After all, one of the biggest contributors to index returns over the years has been tobacco. Even still, some clients preferred to invest along with their values, and I respect that.
Recent events have triggered more interest in investing with one’s values and concerns. SRI is gaining traction, and we would like you to know that if this is something you are concerned with, we are able to accommodate and integrate SRI into your portfolios.
Keeping in mind that we don’t know how future investment results will impact these types of stocks and bonds makes the old underperformance concerns less concerning to me. Furthermore, the universe of options has grown, and as a result, the performance gap appears to be narrowing.
If you are still reading this and thinking about an SRI strategy, you should know that I’m not ready to pursue this with my own retirement dollars. Performance is still a slight concern for me, and Allison and I already support charities in alignment with our values.
However, if you feel strongly about not owning gun stocks, and other non-SRI holdings in your portfolio we can help.
Thank you for taking a look!
Tom Gartner, MSAPM, CFP®
This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.