The month of impact investing
Monday, October 8, 2012
SANTA MONICA, Calif. (MarketWatch) — From the Clinton Global Initiative in New York City to the Social Capital Markets gathering in San Francisco to the SRI in the Rockies conference held in Connecticut, to new reports, membership associations and web sites launched this month, the focal point is impact investing.
All these happenings are important for investors because they foreshadow investment products coming down the pike. These products are unique and address issues as much as they offer returns.
Take the GIVE exchange-traded fund sponsored by AdvisorShares. The ETF funnels a portion of its capital to the GlobalECHO Foundation co-founded by Philippe Cousteau. The foundation, in turn, supports causes globally, such as the Panzi Hospital in the Democratic Republic of Congo. The hospital, in turn, serves its community, many of whom are survivors of sexual violence in the region. Meanwhile, GIVE’s sub advisors try to increase investment returns with the rest of the ETF’s assets under management.
That’s a pretty deep story for investors, who can buy into GIVE for about fifty bucks. The DRC hospital program and commitment was announced at the CGI last week. Sixty-four different commitments were announced at the CGI’s Designing for Impact meeting.
Impact investing typically is differentiated from socially responsible investing (SRI) because it proactively seeks opportunities, both social and financial, whereas SRI negatively screens for opportunities and investor preferences (zapping out alcohol or tobacco stocks, for example). But at this year’s SRI in the Rockies conference (dubbed so because it was held in Colorado for many years before moving to Connecticut this year), impact investing was the theme.