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, with over half (53%) in Europe.
What methodology does the Socially Responsible Investing portfolio follow?
Wealthsimple's SRI portfolios invest in companies that make social responsibility a business priority. Clients gain exposure to funds that take into consideration environmental and societal factors — such as cleantech innovation, fair labour standards and low carbon emissions — while optimising for financial returns. Companies are excluded if they were manufacturers of products such as tobacco or weapons, or if they were involved in activities deemed not to have a positive social impact (e.g. gambling).
And like Wealthsimple's standard portfolios, management fees for SRI portfolios are an affordable 0.5% to 0.7%, and include access to on-demand advice from experienced investment advisers by phone or email.
What fees does Wealthsimple charge for SRI portfolios?
Wealthsimple charges the same fees for our SRI portfolios as our 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 0.22% to 0.32%, compared with around 0.1% 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.
Is there an account minimum for the SRI portfolio?
Yes, there is a £5,000 minimum for our SRI portfolio. Why do we require this? All our portfolios are designed to provide excellent diversity. But, because of the way funds are purchased for the SRI portfolios, we can't offer our clients the kind of diversified portfolio that's part of our ethos without a minimum investment of £5,000.
What if I don't have £5,000 in my account yet?
If you don't have that much in your account yet, don't fret! Start an account with as little as £1 and start building toward your SRI investment. We'll be happy to switch you over to an SRI account once you reach £5,000.
What ETF's are in Wealthsimple's SRI portfolio?
Wealthsimple's SRI portfolio contains the following ETFs:
|UBS ETF MSCI UK IMI SRI||UKSR||Investing in over 150 large, mid and small cap companies listed in the UK, across industries.|
|iShares MSCI USA SRI ETF||SUUS||Exposure to US large and mid cap companies over a range of industries.|
|iShares MSCI Europe SRI ETF||IESG||Over 100 companies spread across Europe and a variety of industries.|
|UBS ETF MSCI Pacific SRI||UB45||Investments in companies listed in developed countries in the Pacific region.|
|iShares MSCI Japan SRI||SUJS||Providing investment exposure to c.60 Japanese companies.|
|iShares MSCI EM SRI UCITS ETF||SUES||
Diversified exposure to c.180 large and mid cap companies across 24 emerging market countries.
|iShares Global Clean Energy ETF||INRG||
Investing in global companies leading the way in delivering clean, sustainable energy.
|iShares Core UK Gilts UCITS ETF||IGLT||
Investments across a range of bonds issued by the UK government.
|UBS Bloomberg Barclays MSCI US Liquid Corporates Sustainable UCITS ETF||UC98||
Exposure to USD bonds issued by companies which meet specific ESG criteria, across sectors.
|Lyxor FTSE Actuaries UK Gilts 0-5Y UCITS ETF||GIL5||
Exposure to bonds issued by the UK government maturing in the next 5 years.