Socially Responsible Investing

What is Socially Responsible Investing?

Socially Responsible Investing (SRI) means investing in companies that meet a certain threshold of social responsibility. SRI takes into consideration environmental impact as well as social and governance concerns. SRI has become an incredibly popular way to invest, growing tenfold over the past 20 years—there are now $22 trillion in assets worldwide in SRI funds. In Canada alone, SRI accounts for 30% of all financial assets.

What fees does Wealthsimple charge for SRI portfolios?

Wealthsimple charges the same fees for SRI portfolios as non-SRI portfolios (more on how fees work here). However, the fees charged by the firms that manage the ETFs are modestly higher than the fees for regular ETFs—a weighted average of 0.25% to 0.40%, compared with 0.2% to 0.3% for regular Wealthsimple portfolios. It’s not much of a difference, but it is a difference. And there is a good reason for the higher fee: someone smart needs to screen for the most socially responsible companies by combing through reams of data and designing cutting-edge analysis tools. And smart people usually don’t work for free.

Which ETFs are in Wealthsimple's SRI portfolios?

Wealthsimple's SRI portfolio contains the following ETFs:

ETF Symbol Description
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 Canadian stocks, excluding companies with a poor social responsibility record based on broad 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

 

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