Morningstar Launches ESG Asset Allocation Managed Portfolios

There are five portfolios in the series, all long-term core portfolios which range from conservative to aggressive. Four are comprised of both stock and bond  ETFs and mutual funds, and the  fifth, the most aggressive, can hold as much as 100% stocks or as little as 80% stocks with fixed income making up the rest.

The five portfolios combine passive and active funds and accompany different risk profiles: aggressive growth, growth, moderate growth, income and growth and conservative. Expense ratios range from 30 to 55 basis points. 

In a recent survey of close to 1,000 investors measuring hypothetical tradeoffs, Morningstar found that over 50% weighed sustainability more heavily than returns and 25% weighed the two goals equally and boomer men, not just women and millennials, were interested in sustainable investments.

Its analysis of 56 Morningstar ESG screen indexes  found that since 2009 41 outperformed their non-ESG counterparts, according to Dan Lefkovitz, Morningstar index strategist, who spoke at a press briefing at the annual conference. ESG indexes consistently scored well for higher quality, financial health and limited volatility than other market indexes, said Lefkowitz.

Ray Sin, senior behavioral scientist at Morningstar, said advisors can benefit from offering these new portfolios because their clients who prefer ESG-focused investments will feel that "if you care about my money and my financial goals you care about me."

— Related in ThinkAdvisor:

• Boomer Men Like Sustainable Investing, Too: Morningstar
• ESG Funds Outperform in Growth and Returns in 2018: Morningstar
• Morningstar Launches a Single Platform for Multiple Model Portfolio