Robo-investor Betterment debuts new portfolios for social and environmental good

By Connie Lin

Betterment is trying to better the world, one investor at a time.

The robo-investing firm, which uses algorithms to manage clients’ cash, is releasing a new set of portfolios for “Socially Responsible Investment (SRI)” that lets customers filter for environmental and social impact.

The move will redesign the firm’s existing SRI portfolio, which debuted in 2017, into a new “Broad Impact” portfolio, and will add two new portfolios for “Climate Impact” and “Social Impact.”

According to a statement from the company, the climate offering will focus on three allocations:

    Companies with the lowest carbon footprint in every sector

    Funds that specifically exclude companies holding fossil fuel reserves

    “Green bonds” that underwrite eco-friendly projects across the globe

The social offering will focus on U.S. companies that value diversity, including the NACP ETF, developed with the NAACP to select for racial and ethnic diversity, and the SHE ETF, which selects for gender diversity within senior leadership.

“Energy and urgency around values-driven investment continues to grow, and we can no longer assume which causes matter most to our customers,” Boris Khentov, senior vice president at Betterment, said in a statement. “Investors shouldn’t have to guess whether their investments are maximizing the impact they value most, and they shouldn’t have to choose between social good and lower costs.”

The new portfolios will be available to Betterment clients, as well as Betterment for Business and Betterment for Advisors customers.

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