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The Next Generation of Investors Wants to Make a Difference

Younger investors tend to be more interested in sustainable investing.
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There has been a generational shift in how investors think about their investments. While most investors still want to build wealth and plan for a comfortable retirement, the next generation of investors, millennials and Generation Z, want to do so in a sustainable way. They see their investments as a way to support the issues that matter to them and to make a positive difference in the world.

Morgan Stanley1 found that 86% of millennials are interested in sustainable investing, and they’re twice as likely as older investors to seek out companies with good social or environmental policies.

Sustainable investing isn’t limited to millennials, however. A 2018 Schroders2 survey of more than 22,000 investors around the world found that 75% of people said sustainable investments have become more important to them in the past five years, and 70% of U.S. investors said they’ve increased their exposure to sustainable investments over this time period. 

We’ve worked with investors from their 20s through their 80s who want also want to invest sustainably. “I want to invest in a way that’s consistent with my values,” a sustainable investor in her 40s told us.

How can you help someone with sustainable investing, especially if you don’t have a personal interest in it? Here are a few ideas:

3 ways to help investors get started with sustainable investing

1. Start with the basics

Sustainable investing follows many of the same rules as other kinds of investing. Sustainable investors still need to be diversified and think about potential risks and returns. So you might start by talking to new investors about the importance of diversification and risk management.

2. Share your fund expertise

If you are a mutual fund investor, you could share your fund knowledge. Funds can be a great tool for sustainable investors, particularly for those who don’t have time or expertise to evaluate a company’s environmental, social or governance (ESG) practices. And there are many funds (like our Sustainable Impact Fund) that do this important analysis for you.

Given the many sustainable funds available these days, you might help a newer investor choose funds or show them how to tell if a fund is a concentrated sector fund or a more broadly diversified fund.

You could also talk about broker trading fees and help new investors decide whether or not to pay a transaction fee to buy a fund.

3. Direct them to us

We have been investing sustainably for decades and would be happy to talk with any investor who is interested in sustainable investing. We also share tips and insights here. 

Morgan Stanley Institute for Sustainable Investing, “Sustainable Signals” 2017 report

2 Schroders Global Investor Study 2018

Sustainable investing: One fund diversified portfolio

The Sustainable Impact Fund (SRIFX) makes it easy for investors to own a portfolio of stock funds that have been screened for performance and sustainability.

SRIFX is designed for investors who want:

  • A globally diversified portfolio of core stock funds.
  • A portfolio that targets funds with strong recent returns and exceptional environmental, social and governance (ESG) ratings.
  • A fund that seeks out funds that actively engage with companies to help them move forward.
  • A professionally managed portfolio for as little as $1,000.
Invest at your broker or directly

You can invest in SRIFX at most major brokers, including Charles Schwab and Fidelity, often without transaction fees. You can also invest directly through our shareholder services: call 1-866-455-3863 to get started or you can set up an account online here.

Diversification does not assure a profit or protect against loss in a declining market.

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FundX Sustainable Impact Fund

SRIFX makes it easy to own a portfolio of stock funds that have been screened for performance and sustainability.

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About FundX

FundX Investment Group pioneered using noload mutual funds to manage client accounts in 1969. Today, the firm uses its evidence-based investment process to manage equity, sustainable and fixed income portfolios of funds for individuals, institutions and mutual funds.

 

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