The ESG portfolios are based on a scoring system built by Morgan Stanley Capital International (MSCI). Companies that earn a higher score than their industry peers over three ESG categories are assigned higher ESG ratings.
"We carefully reviewed the current ESG investment offerings available for investors today," said Joe Correnti, director of portfolio construction and guidance of TD Ameritrade, in a statement. "We then considered the investment vehicles that we believe best captured the essence of ESG investing, and would be appropriate for inclusion in our client portfolios."
In its survey of over 1,050 investors with assets of $250,000 or more, the firm highlights this data:
- Almost one in three (30%) have considered making socially responsible investments, with women (34%) favoring the approach more than men (26%).
- Close to a third (30%) would move their accounts to a different firm to gain broader access to ESG/SRI products — with almost half (47%) of millennials willing to switch.
- Among those who value SRI, social and environmental factors (67%) matter more than financial factors (30%).
- Rate of return is a top priority less than one if five (17% of) investors who are open to SRI products.
- Over half (51%) of those who've considered SRI products say they have at least 21% of their total holdings dedicated to socially responsible investments.
- Boomers tend to care the most about human rights, while millennials focus on environmental impacts.
"With companies providing more extensive data about their ESG practices, in addition to ESG research and analysis methods becoming more advanced than ever before, investors can feel more empowered to address their desires for social and environmental change through their investments," added Demmissie. "By investing in Socially Aware portfolios, they can now further align investments with their values."
