An increasing number of financial firms are making it easier to simultaneously save for retirement and save the planet—a trend likely to swell in 2018 and beyond.
In a statement Wednesday, Bank of America announced the launch of five new Merrill Lynch portfolios that incorporate environmental, social and governance (ESG) factors.
The investment offerings, dubbed CIO Core Impact Portfolios, are the brainchild of the firm’s Global Wealth and Investment Management (GWIM) Chief Investment Office (CIO). As such, they “incorporate the CIO’s disciplined investment process, portfolio construction views, portfolio management and oversight routines.”
Ranging from conservative to aggressive, the five portfolios are largely made up of exchange-traded funds (ETFs).
“The demand for ESG-integrated investment options has increased as more investors are seeking a ‘double bottom-line’ approach to investing and a way to add an environmental or societal impact objective to a financial return,” Chris Hyzy, chief investment officer for GWIM, said in a statement.
Clients of Merrill Lynch advisers and customers utilizing Merrill Edge will have access to the new offerings.
“According to the Forum for Sustainable and Responsible Investment, $8.72 trillion was invested in impact-related investments at the start of 2016, an increase of 33 percent since 2014,” Bank of America explained in its announcement. “Interest is particularly strong among younger investors and women.”
In fact, studies have shown 90 percent of Millennials are either currently investing in impact strategies or desire to do so in the future. “This group alone could drive $15-$20 trillion of inflows over the next two to three decades, roughly doubling the size of the U.S. equity market,” the Bank of America statement added.
“These new portfolios are part of the ongoing expansion of our investment offerings and build upon a broad platform of both solutions and thought leadership in the impact arena,” concluded Keith Banks, vice chairman of GWIM and head of the CIO and the Investment Solutions Group for Merrill Lynch and U.S. Trust.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
