VALUES-BASED INVESTING
When one has achieved a certain measure of financial freedom—adequately satisfying the basic needs of life, indeed living with considerable luxury, the goal of one's life is no longer the pursuit of money for money's sake.
From our work with clients possessing financial freedom, we know that having a sense of larger purpose to one's life—leaving a legacy—truly matter and inspire passion.
When it comes to investments, most people do not fully unlock the potential power that investing in a focused Values-Based or issue-based portfolio can have in making a positive impact on the world.
One problem faced by those wishing to create a legacy for the broader world is the limitations associated with conventional Socially Responsible Investing (SRI) Mutual Funds. These funds employ a technique of stock selection by negation. That is, fund managers create certain rules or criteria to delineate socially responsible companies from those that are not. They then evaluate an asset class and remove securities that do not meet the criteria. The fund is the sum of the securities left over after the negation process. They have no particular issue-based cohesiveness nor are they screened for values consistency.
In other words, companies in the fund may not violate any socially responsible criteria but also are not really doing anything proactive to forward a socially responsible value. As an example—a pharmaceutical company may not be behaving unethically, but they aren't exactly pricing their drugs affordably for people in countries that desperately need those drugs.
As if this news isn't bad enough, the other main frustration with conventional SRI Funds is that they have historically produced mediocre to lackluster returns to shareholders, compared to benchmark indexes.
The net result of investing in these funds is that investors don't get satisfaction from the investment because it lacks any proactive, focused agenda, and the returns are mediocre, to boot!
The Solution
At Arete we have developed a novel approach to help our clients unlock the power inherent in their wealth and gain the satisfaction of "putting their money where their heart is."
We have developed a set of value-specific portfolios crafted from the ground up, designed to accomplish two things: first, to get solid, above-average returns on investments; and second, to have a focused, consistent, portfolio of companies that are proactively forwarding an agenda our clients care about and will make the world a better place in the short and long term.
Our current lineup of Values-Based Focus Portfolios include:
- Green Ethic Energy
- Organic Lifestyle
- Clean Water Infrastructure
The pricing of these portfolios is a flat percentage management fee per year based on the amount of assets is each portfolio. Pricing ranges from .25% to 2% of assets in the portfolio.
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