Investors looking for the best stocks this year might want to consider an SRI 2018 strategy.
SRI, or socially responsible investing, involves buying stocks in companies that actively engage in social justice and environmental sustainability. Although this type of investing has been going on for decades, there has been an increased interest in recent years. Today, about $9 trillion of the $40 trillion in investment assets in the U.S. can be categorized as socially responsible.
For these reasons and more, you should allocate your funds with an SRI 2018 plan.
Millennials Are Driving The SRI 2018 Growth
A big reason behind the surge in the popularity of SRI is the Millennial interest. A 2017 report from the Institute of Sustainable Investing found that when compared to the overall population, Millennial are twice as likely to target stocks from companies that had social or environmental goals. They believe that their investments can change their world, and they strongly favor sustainable 401(k)s.
Another study from Spectrum Group found that one in four investors under the age of 45 have allocated 25 percent of their investments in companies that followed social or environmental protocols. Both Millennials with and without high net worths strongly target these companies for their portfolios. And with more Millennials becoming investors, that means SRI is sure to grow in the coming year.
With that being said, some Millennial are not jumping in just yet. While a majority of Millennials support ethical companies, only about a quarter of them are actually investing in them. That means that there are still more opportunities for young people to invest in these companies.
How Socially Responsible Stocks Are Performing
The truth is that investors don’t have to sacrifice their morals just to make a buck. This is used to be the notion in investing, but now that is no longer the case.
A 2017 CNBC review of Morningstar data found that funds from ethical investing stocks performed roughly the same as their traditional investing counterparts. Over the long haul, you can still make money and do good with your investments.
In recent years, some investors are beginning to allocate resources with the goal of creating a better world for future generations. As a result, these investors have relied upon research that indicated which companies were doing their due diligence to create a better world. It seems that this thorough research has resulted in portfolios that performed better over time.
Basically, increased research has allowed SRI stocks to flourish.
Best Socially Responsible Investing Options In 2018
If you want to invest in this space, there are many options. Some of the top actively-managed funds include Parnassus Endeavor, Parnassus Mid-Cap and TIAA-CREF Social Choice Bond Fund. For index funds in the socially responsible investing space, keep an eye on the Vanguard FTSE Social Index.
Not to be outdone, there are also a few ETFs that are perfect for the socially responsible investor. ETFs provide great tax efficiency and have become a popular investing vehicle in recent years. Some of the tops ETFs for SRI 2018 investors are the SPDR SSGA Gender Diversity Index ETF, the First Trust NASDAQ Clean Edge Green Energy Index Fund, the Inspire Global Hope ETF, and Workplace Equality Portfolio.
Finally, if you like dividend investing, there are some good SRI stocks in 2018. Verizon, Amgen Inc, Cisco Systems and, Prudential Financial are among the best socially responsible dividend stocks for investors.