Impact investing portfolios that come with a performance guarantee

Three new portfolios from Motif Investing promise to refund a monthly subscription fee for underperformance

Mar 7, 2017 @ 12:51 pm

By Liz Skinner

Three new impact portfolios from Motif Investing, which aim to link an investor's financial and social goals, come with unique guarantee if the values-focused investments fail to perform.

The automated investing firm will refund a $9.95 monthly subscription fee if the portfolios underperform by 1% or more in the first year, according to Motif.

The performance of each portfolio — one focused on companies that support a sustainable planet, another on fair labor and the third, good corporate behavior — will be compared to a base portfolio that would be appropriate for an investor before being adjusted to include companies that support their values.

"With Motif Impact Portfolios, investors can meet their financial goals without compromising their values, they'll know exactly what their money is funding," said Hardeep Walia, founder and chief executive of Motif.

(More: Impact investing in the age of President Trump)

Investors will be able to see exactly which stocks are in their portfolios and can make changes at any time. However, if the investor adjusts the portfolio holdings, the guarantee does not apply, he said.

Motif teamed with MSCI ESG Research, a leading provider of environmental, social and governance data, to create portfolios that consider a company's earnings performance, in addition to values-based criteria.

Interest in impact investing has grown in recent years and is especially popular with women and millennials, multiple surveys have shown.

(More: Robos jumping into socially responsible investing space)

Assets in socially responsible investing, which include assets tied to an impact mandate, hit $8.7 trillion last year. That's up more than 183% since 2010, according to US SIF, The Forum for Sustainable and Responsible Investment, an association of socially responsible investment professionals.


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