NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Betterment, the largest independent online investment advisor, today announced their socially responsible investing (SRI) portfolio strategy. Betterment’s SRI strategy aims to maintain the diversified, low-fee approach of Betterment’s portfolio advice while increasing exposure to companies that meet SRI criteria.

Socially responsible investing is an approach to investing that reduces exposure to companies that are deemed to have a negative social impact—e.g. companies that profit from poor labor practices or environmental devastation—while increasing investment in companies that have a positive social good—e.g. companies that foster inclusive workplaces or work toward environmental sustainability.

The Betterment investing team, which includes PhDs, CFP^® professionals and CFAs, analyzed all low-cost funds oriented toward environmental, social, and governmental (ESG) criteria, searching for products that could replace components of Betterment’s portfolio strategy without sacrificing the parts of Betterment’s advice that protect investors’ returns the most: global diversification, tax optimization, and control of cost.