According to a study surveying 1,003 millennials by US-based agency Cone Communications, this generation is one of the most socially conscious generations — 87 percent are more willing to purchase a product with social and environmental benefit and 70 percent are willing to spend more for a product that aligns with issues they care about.
“One of the best parts of Wealthsimple is that we (the team) are all clients. That means we always have ideas for new features that we want to see in the product,” said Wealthsimple founder and CEO Mike Katchen. “SRI is one feature that clients and the team have been asking for since day one. It was the number one most requested feature.”
The responsible investment portfolios will work in a similar way as Wealthsimple’s conventional investments portfolios. The portfolio will target companies that boast low carbon emissions, advance cleantech innovation, and promote sustainable growth in emerging markets. Options will include investments in the iShares MSCI ACWI Low Carbon Target ETF; iShares Jantzi Social Index ETF; Vident International Equity Fund; PowerShares Cleantech Portfolio; and BMO Mid Federal Bond Index ETF.
“Our clients are young professionals who care about the environment, social justice, and gender equality, and they want their investments to reflect their values,” said Katchen.
Katchen said that the company ran into a few unique challenges when building the SRI — mainly returns. “At the end of the day, we’re in the business of making our clients long-term returns. We had to make sure that we could build a portfolio that had similar diversification and long-term return characteristics to a non-SRI portfolio to live up to our value proposition,” said Katchen. “Second, socially-responsible investing can mean different things to different people. Building a portfolio that would broadly be considered socially-minded took some work.”
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