Aligning Your Portfolio With Your Convictions

Investors are making their voices heard like never before. The perhaps well-intentioned environmental, social, and governance (ESG) movement has received unanticipated backlash and awakened troves of investors to the possibility that their portfolio can be used for or against their convictions.

Tired of remaining silent or surrendering their voice to proxy voting services misaligned with their values, investors are in search of managers and investment tools that align their portfolio with their convictions. Access portfolios is that tool. By owning stocks directly, as opposed to indirectly through ETFs or mutual funds, Blue Trust clients can preserve the right to vote their proxies. Some clients may take the opportunity to vote themselves, but many enroll in our principles-based proxy voting, which is based on the belief that human productivity and dignity result in abundant and innovative solutions to the world’s problems. For example, this voting policy supports:

• Leadership and governance policies that protect shareholders as the primary interest
• Protecting equal rights, religious liberty, and the sanctity of life
• Environmental policies that are not detrimental to shareholders’ interests and not used for political pressure

In addition, clients can screen in and out certain investments and are able to collectively use their voice for corporate engagement to proactively interact with company management. For example, our clients, through our corporate engagement partners, have challenged Starbucks in their apparent discrimination against religious institutions by not matching charitable contributions from employees when they claim to match all 501c3 donations. Or, clients have challenged Apple to account for what appears to be a pattern of dragging their feet on protecting children from sexually exploitative content.

Access portfolios help clients align their portfolios in public investments with their convictions, but what about in private or alternative investments¹? Historically it’s been challenging to do so for a couple reasons. First, because private companies are not required to disclose the same amount of information as public companies, it is more difficult to identify and screen in or out certain investments. Second, in most private investments, you won’t always know what you’re investing in, at least at the onset of the fund, because the manager will be investing the fund over time. And third, the universe of managers applying a faith-focused or impact-focused filter was small and hard to identify.

We have heard our client’s desires for more of these opportunities and we are proud to have recently launched a partnership with Vident, Mammoth, and Brightlight, which provide unique investment tools that align a client’s financial goals with their faith and values. This first-of-its-kind platform is set to transform the landscape of private investing by offering a comprehensive, faith-driven approach in alternative investments in private equity, venture capital, private credit, and private real estate. See the chart below for more details.

Investors may have shied away from faith-based investing in the past because they thought it might require sub-par returns. While those funds exist and may be better suited to investing through a donor-advised fund (using capital already allocated for charitable purposes), we have managers who believe they can generate above-average returns while still prioritizing faith or impact integration.

We know that no two clients are exactly alike. Besides different cash flow needs, clients will have different convictions regarding how they invest and what they invest in. Using faith and impact investments may result in an investment strategy more aligned with your goals and values. Stay tuned for future updates, and if you would like to learn more, please reach out to a Blue Trust advisor. To read more about Access portfolios, click here.

¹ Private or alternative investments are not suitable for all clients and clients are generally required to meet a certain accreditation status typically measured by net worth and/or income.

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