As previously discussed in the Around the Brokerage Industry: Motif Investing blog post from September 10, 2014, Motif Investing is a unique online brokerage firm that offers inexpensive bundles of individual stocks developed based on a unifying theme or “motif” for an initial investment of as little as $250. In mid-October, the firm used its distinctive business model to create a very relevant, and even more importantly, necessary new motif: “Fighting Ebola.”
Motif Composition and Charitable Benefits
The “Fighting Ebola” motif is currently composed of twenty stocks diversified across four sub-themes: Drugs & Vaccines, Market Hedge, Protective Equipment and Diagnostics. Some of the firms represented include Amgen Inc., Johnson & Johnson, DuPont and Luminex Corporation. It is noted in the description of the motif on the firm’s public site that investors in companies currently involved in the fight to cure Ebola should understand the unique risks inherent in investing in a theme that has no track record and increased volatility. While the portfolio does include the inverse leveraged Russell 2000 ETF that is designed to diminish negative market impact from a potential epidemic, it is made clear that the onus is on the investors to constantly monitor their holdings within the motif.
While investing in the motif might be understandably risky, the firm’s commitment to donating all trade commissions to charities currently fighting Ebola is an uplifting gesture that makes an investment in the fight against Ebola ever more desirable. According to Motif Investing’s pricing information, this means that the $9.95 commission charged upon purchase, sale or rebalancing of the motif goes directly to Ebola-fighting charitable organizations. There is currently no termination date listed for the commission donations.
Motif Investing’s creation of a “Fighting Ebola” motif, in addition to its pledge to donate commissions associated with the motif to charities fighting Ebola, further demonstrate its status as a brokerage firm with an innovative edge among its competition. More traditional brokerage firms tend to be more conservative in their charitable donation techniques and strategies. Merrill Lynch Wealth Management and Ameriprise Financial, for example, are currently running temporary hunger alleviation and HIV/AIDs –focused campaigns (respectively) that call upon common and somewhat hackneyed fundraising techniques. While Ameriprise is simply pledging a $500,000 matching commitment to money donated to Feeding America, Merrill Lynch Wealth Management is partnering up with Nike to donate 40 cents for every mile run by a participant (up to a total maximum donation of $1,000,000) to the Global Fund to fight AIDS. While both of the aforementioned charitable campaigns are certainly admirable and undoubtedly necessary, Motif Investing’s advocacy of investing in stocks centered on a current and relevant cause (while simultaneously donating to the cause itself) takes charitable fundraising to a new level. Investors coming together to focus on a pressing issue of global concern, while potentially benefiting themselves and undeniably helping those affected, is an idea upon which more brokerage firms should capitalize and act.