ESG Roboadvisors are a type of roboadvisor that focuses on investing in companies that meet certain environmental, social, and governance (ESG) criteria. These criteria may include factors such as:
Environmental impact: The company's impact on the environment, such as its greenhouse gas emissions or water usage.
Social responsibility: The company's commitment to social responsibility, such as its labor practices or its treatment of its employees.
Corporate governance: The company's corporate governance practices, such as its board of directors or its executive compensation.
ESG roboadvisors use algorithms to select investments that meet their ESG criteria. They can be a good option for investors who want to align their investments with their values and who are looking for a low-cost, automated way to invest.
Here are the top 10 roboadvisors for ESG investments in 2023:
1. Betterment
Betterment is one of the most popular roboadvisors in the market. It offers a variety of ESG portfolios that are built with a focus on environmental, social, and governance factors. Investors can choose from portfolios that focus on different areas of ESG, such as climate change, diversity, and human rights. Betterment also offers a portfolio that is designed to be both socially responsible and low-cost.
2. Wealthfront
Wealthfront is another popular roboadvisor that offers ESG portfolios. Wealthfront's ESG portfolios are similar to Betterment's in that they offer a variety of portfolios that focus on different areas of ESG. Wealthfront also offers a portfolio that is designed for investors who want to have a positive impact on the environment.
3. Personal Capital
Personal Capital is a roboadvisor that offers a more limited selection of ESG portfolios than Betterment or Wealthfront. However, Personal Capital's ESG portfolios are designed to be more transparent than those of other roboadvisors. Personal Capital also offers a portfolio that is designed to be both socially responsible and tax-efficient.
4. Ellevest
Ellevest is a roboadvisor that is specifically designed for women. Ellevest offers a single ESG portfolio that is designed to help women reach their financial goals. The portfolio is built with a focus on environmental, social, and governance factors that are relevant to women.
5. Acorns
Acorns is a micro-investing app that allows users to invest spare change in ESG-focused ETFs. Acorns offers a variety of ESG ETFs to choose from, and users can set up automatic investments to make it easy to save for the future.
6. Green Century Fund
Green Century Funds is a family of mutual funds that invest in companies that meet certain environmental, social, and governance (ESG) criteria. The funds are managed by Green Century Capital Management, a company that is wholly owned by environmental and public health nonprofit organizations.
Green Century Funds offers a variety of funds, including:
Green Century Equity Fund: This fund invests in U.S.-based companies that meet Green Century's ESG criteria.
Green Century Balanced Fund: This fund invests in a mix of U.S. stocks and bonds that meet Green Century's ESG criteria.
Green Century International Index Fund: This fund invests in companies in developed markets outside of the U.S. that meet Green Century's ESG criteria.
7. Schwab Intelligent Portfolios
Schwab Intelligent Portfolios is an automated investment service offered by Charles Schwab. It is a roboadvisor that uses algorithms to build and manage investment portfolios for investors of all experience levels.
Schwab Intelligent Portfolios offers two different levels of service:
Schwab Intelligent Portfolios: This is the basic level of service. It is free to use and does not require a minimum investment.
Schwab Intelligent Portfolios Premium: This is the premium level of service. It costs $30 per month plus a one-time planning fee of $300. It offers additional features, such as access to a certified financial planner and a digital financial plan.
Both levels of Schwab Intelligent Portfolios use a risk-based approach to investing. This means that your portfolio is allocated to different asset classes, such as stocks, bonds, and cash, based on your individual risk tolerance.
8. SoFi Invest
SoFi Invest is a financial technology company that offers a variety of investment products and services, including roboadvisors, individual stocks and ETFs, and cryptocurrency trading.
SoFi Invest's roboadvisors are called SoFi Automated Investing. They use a risk-based approach to investing to build and manage investment portfolios for investors of all experience levels. SoFi Invest's roboadvisors offer a variety of features, such as automatic investing, rebalancing, and tax-loss harvesting.
9. Carbon Collective
Carbon Collective is a roboadvisor that focuses on sustainable investing. It offers a variety of ESG portfolios, including a Climate Action Portfolio and a Social Justice Portfolio.
Carbon Collective's Climate Action Portfolio invests in companies that are working to reduce their environmental impact. The portfolio excludes companies that are involved in fossil fuels, deforestation, and other activities that contribute to climate change.
Carbon Collective's Social Justice Portfolio invests in companies that are working to address social issues such as inequality, poverty, and discrimination. The portfolio excludes companies that are involved in controversial activities such as weapons manufacturing and tobacco production.
10. Stash
Stash is an investment app that allows users to invest in stocks, ETFs, and fractional shares. It is a popular option for beginners because it is easy to use and has low fees.
Stash offers a variety of features, including:
Automated investing: Stash allows users to set up automatic investments, so they can save for their goals on a regular basis.
Round-up investing: Stash rounds up your purchases and invests the spare change.
Themed investing: Stash allows users to invest in themed portfolios, such as the "Sustainable Future" portfolio or the "Women in Tech" portfolio.
Education: Stash offers educational resources to help users learn about investing.
Here are some additional factors to consider when choosing a roboadvisor for ESG investing:
Portfolio customization: Some roboadvisors offer more customization options than others. This is important if you have specific ESG preferences or goals.
Fees: Roboadvisor fees can vary. It is important to compare fees before choosing a roboadvisor.
Customer service: Roboadvisors vary in terms of their customer service offerings. Some roboadvisors offer 24/7 customer support, while others only offer support during business hours.
Track record: It is important to look at the track record of the roboadvisor's ESG portfolios. This will give you an idea of how the portfolios have performed in the past.
Disclaimer - This content of this article should not be construed as financial or investment advice.