Socially responsible investing

Portfolio options screened for environmental, social, government criteria

Getting started

What is socially responsible investing?

Socially Responsible Investing portfolios are designed to help you express your values and social ideals through your investments. Despite the various limitations that SRI portfolios face today, Betterment wants to support its customers in meeting their desires for more socially responsible vehicles for investing. Our approach to SRI has three fundamental dimensions: Reducing exposure to companies involved in non-socially responsible activities and environmental, social, or governmental ...

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How do I enable a socially responsible investing portfolio?

You can enable the SRI portfolio when adding a new goal, or updating your existing goal’s portfolio strategy. To update an existing goal, log in from a web browser and select your goal from the homepage. Go to the “Holdings” tab, then select “Edit” underneath Portfolio Strategy and follow the prompts. There is no minimum balance to use any of our SRI strategies. If you are already invested in Betterment’s SRI portfolio strategy and choose not to upgrade to any of these options, you will remain ...

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How it works

How does using SRI impact the robo-advice I will receive from Betterment?

The Betterment SRI portfolios have their own set of projections and advice based on capital market assumptions. Outputs such as the projection graph and recommended deposits will reflect your new portfolio selection, and you will be able to view them the same way as our other portfolio strategies via the Betterment app and website.

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If I have Tax Loss Harvesting enabled, how long will I be in the tertiary position?

Our optimizer strongly prefers to shed tertiaries from the portfolio when there is no wash sale impact. This does not guarantee that it will be removed, but our optimization algorithms are strongly guided to avoid tertiary exposure. To learn more about TLH+, please review our TLH+ white paper and TLH+ disclosures.

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Can I use a socially responsible investing portfolio with Tax Loss Harvesting and/or Tax Coordination?

Yes. To learn more about the impact of the SRI portfolio strategies on certain product features, including TLH+ and Tax Coordination, please review our SRI disclosures.

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Investment details

Broad Impact

The Broad Impact SRI portfolio focuses on ETFs that rate highly on a scale that considers all three environmental, social and governance (ESG) pillars. It seeks to give investors greater exposure to all of the different dimensions of social responsibility, such as lower carbon emissions, ethical labor management, or greater board diversity. The Broad Impact portfolio also invests in a broad U.S. stock market ETF focused on shareholder engagement. When compared to Betterment’s Core portfolio, we ...

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When will Betterment offer full SRI/ESG Portfolios?

We are now able to provide you with multiple globally-diversified SRI portfolios, at relatively low cost, that are expected to track the performance of the long-standing Betterment Core portfolio closely. However, in order to maintain geographic and asset class diversification and to meet our requirements for lower cost and higher liquidity in all SRI portfolios, we continue to allocate to some funds that do not have SRI mandates, particularly in bond asset classes. Betterment may add ...

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Where can I see a full list of what I’m invested in?

You can see exactly which holdings you are invested in by logging in from a web browser, selecting a specific goal from your home page, then going to the “Holdings” tab. Click on any of the asset classes to learn more. Selecting the hyperlink will take you directly to the fund’s prospectus page which will list all companies the fund tracks.

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How do the SRI strategies compare to Betterment's Core Portfolio Strategy?

We can draw comparisons between the Betterment Core Portfolio and the three different socially responsible investing options. Betterment Broad Impact vs Betterment Core When compared to Betterment’s Core portfolio, there are three main changes: US stock exposure is replaced with a broad US ESG stock market ETF (ESGU) and a shareholder engagement focused US stock market ETF (VOTE). Two other broad US ESG stock market ETFs (ESGV and SUSA) serve as the alternative tickers for ESGU for Tax-Loss ...

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Can I go back to the Betterment portfolio once I opt into SRI?

Yes. To edit your portfolio strategy, log in from a web browser and select your SRI goal. Go to the Holdings tab, then select “edit” under Portfolio Strategy. Please note you can only make one change to your portfolio strategy per day.

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What is the VOTE ETF?

VOTE is a first of its kind, sustainability-focused ETF, which will differentiate exclusively on how it plans to actively engage with the large cap US companies it holds via shareholder proposals and proxy voting. Engine No. 1, an activist hedge fund that focuses on sustainable investing issues, is the creator and manager of VOTE. Engine No. 1 made headlines in early June, 2021, by successfully installing three directors on Exxon’s board with the goal of pushing the company to reduce its carbon ...

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What will these new portfolios cost me in fund level fees?

As of June 29, 2021, the Betterment Core portfolio strategy has an expense ratio range of approximately 0.05% to 0.16% on average, when the weighting of the portfolio is taken into consideration. In comparison, the expense ratios for the Betterment SRI portfolios will be in the following ranges, depending on the relative allocation to stocks and bonds within the portfolio: Broad Impact: 0.13% - 0.18% Climate Impact: 0.16% - 0.21% Social Impact: 0.16% - 0.20% Sources: Xignite and Betterment ...

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Climate Impact

The Climate Impact SRI portfolio is focused on being climate-conscious rather than focusing on all ESG dimensions equally, designed to give investors exposure to climate-conscious investments without sacrificing proper diversification and balanced cost. By investing in the Climate Impact portfolio, investors are actively divesting assets away from holders of fossil fuel reserves while cutting their investments’ carbon emissions. Carbon emissions per dollar of revenue in the 100% stock Climate ...

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Social Impact

The Social Impact SRI portfolio is similar to our Broad Impact SRI portfolio, but further promotes the social pillar of ESG investing by allocating to two stock ETFs which specifically focus on diversity and inclusion: Impact Shares NAACP Minority Empowerment ETF (NACP) and SPDR SSGA Gender Diversity Index ETF (SHE). By investing in NACP, investors are allocating more of their money to companies with a better track record of social equity as defined by the NAACP while maintaining market-like ...

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Will the performance of my SRI portfolio deviate from my Betterment portfolio?

When some first consider ESG investing, they assume that they must pay a heavy premium in order to have their investments aligned with their values. However, industry research, our historical backtesting, and our forward looking returns analysis all show that we should not expect the performance of SRI portfolios to significantly deviate from the Core portfolio over the long term, although there can be return differences over shorter periods. Past performance does not guarantee future results. ...

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