Investing with your Heart

Quite a few individuals believe that return on investment shouldn’t be the only criterion for how they invest their money. For them, the social impact of investing is just as important, if not even more important. The history of socially responsible investing stretches at least as far back as the mid-18th century, but its more modern form began taking shape in the 1960s, amidst the fight for civil rights and the emerging anti-Vietnam protests.

According to the The Forum for Sustainable and Responsible Investment, more than $8.7 trillion is managed under sustainable and responsible investing principles. This includes mutual funds, endowments, and even venture-capital funds. Amounts in mutual funds are subject to fluctuation in value and market risk. Shares, when redeemed, may be worth more or less than their original cost. Mutual funds are sold only by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing.

  • What is “Socially Responsible Investing?”
    The definition of socially responsible investing has evolved. And it may be referred to by different names, such as “sustainable and responsible investing” or “values-based investing.” Whatever term is used, the investment discipline is usually characterized by a set of principles that govern how investments are selected. One widely used framework includes environmental, social, and corporate governance criteria (ESG).
  • What is “ESG Investing?”
    ESG Investing stands for environmental, social, and governance investing. ESG criteria of good corporate governance, positive environmental impact, and responsible community involvement are a guide for making investment selections, akin to other investment-related criteria, such as price/earnings ratio or revenue growth. The underlying belief is that good corporate practices may lead to better long-term corporate performance. Investor experience with socially responsible investing will vary.
  • What is “Impact Investing?”
    Also known as thematic investing, impact investing differs from the two above. The main goal of impact investing is to secure a positive outcome regardless of profit. For example, an impact investor may use ESG criteria to find and invest in a company dedicated to the development of a cure for cancer no matter the outcome of that investment.

As with any mutual fund or exchange-traded fund, socially responsible investments are subject to fluctuation in value and market risk. Shares, when redeemed, may be worth more or less than their original cost. Individuals should also recognize that each investment approach may operate under a different set of principles, so you should be careful that your selection mirrors your personal values and beliefs.

Disclaimer: The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with Grandview Asset Management, LLC. The material provided is for general information, and should not be considered a solicitation for the purchase or sale of any security and does not constitute individualized investment advice. Copyright 2021 FMG Suite.