Socially Responsible Investing (SRI) is a steadily growing market, and a huge contributor to this rise stems from millennial demand. SRI is a broad term that has three main approaches: ethical investing; environmental, social and governance (ESG) investing; and impact investing. Sources indicate that millennials place a higher premium on socially conscious products than when compared to their older counterparts. Millennials are also more willing to pay a little extra for products that are associated with a specific cause or mission. Companies like TOMS, Warby Parker and Burt’s Bees have been reaping the benefits of positioning themselves as socially conscious brands for several years, and asset managers are looking to capitalize on this upward trend as well. For example, earlier this year PIMCO expanded its ESG offerings, and in 2016 Janus released a line of thematic ETFs, while OppenheimerFunds unveiled two new ESG ETFs.
Janus Thematic ETFs
A unique app that is attempting to satiate the millennial demand for “feel-good” investing is Stash, which repackages BlackRock iShares and Vanguard ETFs into a user-friendly platform. The app organizes ETF options into three easy-to-understand categories: I Want, I Like and I Believe. Stash’s focus on SRI is what sets it apart from other micro-investing apps such as Robin Hood or Acorns. For example, the I Believe section includes a Do the Right Thing category that markets the iShares MSCI USA ESG Select Fund, which invests in socially responsible U.S. companies. Stash places a high emphasis on giving novice investors the opportunity to invest in causes that they care about. The app also stands out for being devoid of jargon and does not bombard investors with a high volume of statistics. Millennials often report feeling intimidated by the process of investing and cite lack of knowledge and costs as key factors to their apprehension. Stash’s appeal to millennials is twofold, as it lessens the intimidation associated with investing while providing an easy way to access SRI opportunities.
Stash App – Introductory Screen, I Believe Tab and Fund Spotlight