How liberals can put their money where their mouth is through investing

There’s no anti-Trump investment fund. But there are plenty of options for investors who want to back business focused on advancing renewables and other progressive causes.
For a deep overview, head to The Forum of Sustainable and Responsible Investment, which has guides for investing to advance women and curb climate change.

In my own research, I looked for index funds with low expense ratios — the investment strategy favoured by smart people from Daniel Kahneman to
Henry Blodget — and found some good options.

For broadly progressive options, there’s VFTSX, which tracks US companies that rate highly on social, human rights, and environmental criteria, at a 0.22% expense ratio. Its largest holdings include Apple, Microsoft, and Alphabet. Outside the US, ESGD tracks companies in developed with high environmental, social, and governance scores, at a 0.40% expense ratio. ESGE does the same in emerging markets at a 0.45% expense ratio.

People focused on renewables might consider QCLN, which tracks green companies on the NASDAQ, with the largest holding in Tesla. GEX is a similar option that has more global exposure (Tesla is the second-largest holding). ICLN is an option with lots of emerging market exposure (led by a bunch of companies you haven’t heard of). Those three have expense ratios ranging from 0.47% to 0.65%.

For more conservative and moderately cheaper options, there are broad index funds that simply leave out fossil fuel companies. SPYX does that for the US-based S&P 500 and CRBN does that for global markets — both at a 0.20% expense ratio.

People focused on advancing women might try SHE, which tracks big US companies that are leaders in gender diversity, at a 0.20% expense ratio. Its largest holdings include Pfizer, PepsiCo, Amgen, and 3M.

Schwab has a much longer list of socially conscious funds. Liberals can also, of course, divest from fossil fuel companies and others that don’t align with their political views.

Will socially conscious investing make you rich? There are
a bunch of studies saying that say socially responsible investing is competitive — and Al Gore’s green hedge fund seems to have done well — though you’ll hear people take both sides. In any case, highly focused investments (e.g., a fund of solar companies run by minority women) tend to be higher risk than broad ones.

Will socially conscious investing make a difference? Probably not — unless millions of people get on board or your name happens to be Warren Buffett — but it may help some people sleep at night.

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