Anytime you start putting together a portfolio of investments, you need to ask yourself what the objective of that pool of money is. The objective determines the overall allocation, and then we can work on filling that allocation with the right investments.
For example, you may be saving for retirement in the next 5 years or you may be putting money into a college 529 savings account for your 2 year-old. The amounts you add and the overall weighting of stocks to bonds will vary based on your time frame and general tolerance for risk.
In addition to assessing your financial objectives, we also want to consider your goals for impact, Some areas you may want to consider include investing in renewable energy, supporting women in the workplace, providing international micro-loans or access to clean drinking water.
Once we assess your goals and timeframe, score you for an appropriate sector weighting, we want to determine the best funds to fit into the portfolio.
At Impact Investors, we use a program called Fi360 to analyse all of the publicly traded Sustainable, Responsible, Impact (SRI) funds on the market. The software considers over 15 criteria such as performance, volatility, style drift, and expenses, using a weighted scoring methodology comparing the fund to its peer group.
If that sounds complicated, it's because it is. As a fiduciary, it's important to have a process that addresses why you're not picking any other fund but the one you're picking so, it needs to be global and systematic.
A large part of your fund selection might be limited to the platform that you're using. Some banks or brokerage houses may not have a large variety of SRI funds that are avilable as No Transaction Fee (NTF) funds, and so you'll want to look for what's called an "open architecture" provider so that you'll be able to rebalance without incurring inordinate fees.
That's the very basics but it's enough to get you started. Contact us and let us know what software you use and which funds you like. Or, if you want help with your portfolio, we're happy to offer a complimentary half-hour phone consultation to determine how we might be able to work together.