Merrill Lynch adds social impact portfolios to platform

Client demand leads wirehouse to create multi-asset vehicles that reflect investors' values

Jun 15, 2015 @ 12:53 pm

By Liz Skinner

Bank of America Merrill Lynch has expanded its lineup of social impact investing offerings, creating new portfolios for clients who want to align their assets with their values.

The firm's platform now includes five of these portfolios made up of mutual funds and exchange-traded funds. Each portfolio will have six to eight investments, with conservative portfolios including more fixed income and aggressive ones more equity, said Kim Paris, impact investing director for Merrill Lynch.

Merrill Lynch's 14,000 advisers previously had mostly single-asset investments to offer clients who increasingly want to put their capital to work in ways that return more than just financial gains. Some separately-managed accounts also are available from U.S. Trust, according to the firm.

“Clients are telling us they want their portfolios to reflect their values and help improve the world they live in,” said Andy Sieg, head of Global Wealth and Retirement Solutions for Merrill Lynch. “We have made impact investing a strategic priority and will bring clients innovative solutions that help them promote positive social change.”

(More: Why it's time to believe the hype behind ESG investing)

Advisers report more and more clients are asking to link their capital and their global concerns, leading wirehouses, custodians and many independent broker-dealers to create impact investment platforms. The offerings are becoming more robust as more products are created for the space.

For example, BlackRock announced in February it was creating a unit to bring together all of its values-based investment strategies.

Merrill Lynch, which has $2 trillion in assets under management, said it will provide detailed reports on the investments held within the portfolios to help advisers evaluate along with clients whether they are putting their capital to work in the right place.

The reports will compare performance to traditional benchmarks — not those focused on environmental, social and governance characteristics — so clients and advisers can judge the impact investments against something they understand and are familiar with, Ms. Paris said.

As is the goal with impact investing, the new portfolios seek to offer a competitive return along with having a positive influence.

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