[Rachel]

I want my dollars to go into funds that represent my values, but am completely lost with how to start. such as sustainability, social responsibility, or ethical business practices.

What are the best strategies for identifying and choosing these types of investment funds?

Are there specific tools, platforms, or criteria that can help ensure my investments reflect my beliefs?

I’ve followed the low cost index fund investing strategy; any advice or episodes you’d suggest to start?

I’d love to hear from others who have experience with values-based investing.

Any recommendations or insights?

Thanks!!

[Barry]

Not enough information. What values are you hoping to represent? If it means that you want companies that are ethical, socially responsible, concerned with the environment, etc, consider one of the better-known ESG funds — ESGV (avoids companies that sell weapons, tobacco, fossil fuels), ESGU (companies that are DEI-friendly, reducing carbon footprint, have ethical governance), EFIV (tracks an ESG-adjusted version of the SP500).

Just hypothetically, if you wanted the opposite of that, I hear that there are now investment funds that focus on industries typically excluded by ESG funds (YALL, MAGA, XLE).

I haven’t invested in either of these competing sets of products, but maybe one would suit you?

[Rick]

Understand that vultures prey on this idea. With fees. With greenwashing. With esg scoring models darker than a black hole. With marketing material tailor made to appeal to your soul.

Did I mention fees?

The rabbit hole of hypocrisy of those who sell ESG funds and similar is deep. For the few that go looking. Most don’t and feel righteous.
ESG funds should be avoided.

Maybe buy VTI as core and the build sector funds on top of it that you prefer.

Just know many use sector funds to….underperform.
It is often the price for playing a game stacked well against you but those best positioned to fleece people via fees (hint…esg mangers).

I honestly don’t want to be negative but this is the dark history behind esg and similar.

Best to be aware before you invest.

[Ernest]

Find out which companies share the same beliefs – buy those stocks.

[Christopher]

You won’t typically find a fund that does this for you. There are generic esg funds, but they may or may not share your values so you’ll have to dig in and vet everything.

If you value democracy, holding shares of companies you _don’t_ like gives you a vote to change them – esg doesn’t enable this.

If you value the environment, you’ll want funds that minimize returns so you don’t consume more in the future, while higher returns enable more consumption, and thus a high carbon footprint.

If you value various social causes, you’ll typically want to donate to charities rather than trying to extract profit from a company that must compete with other priorities too.

[Trevor]

Also keep in mind that any filter you place over the broader market will likely result in higher fees and lower returns over the long run.

Kind of the opposite of FI objectives.

[Sara]

TSLA is a top five holding in my Vanguard ESGV fund. Plus, the fees…meh.

[Author]

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