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Investing with Values

On Guns and Investing: Our Response

The Betterment SRI portfolio represents a reduction in exposure to weapons manufacturers compared to conventional portfolios, but it isn’t perfect. There’s a good reason for that.

Articles by Alex Benke, CFP®

By Alex Benke, CFP®
VP of Advice and Investing, Betterment  |  Published: March 22, 2018

Many have written us in the wake of the recent mass shooting tragedy with a clear and simple question: “Does my Betterment Portfolio contain gun or weapons manufacturer stocks?”

The tough, but honest, answer to that question is “Yes, a little.” At Betterment, we invest in thousands of securities across industries so that our customers can pursue the highest returns for the expected risk. We build diversified portfolios by selecting exchange-traded funds (ETFs) that offer low costs and tax efficiency. In short, we’re buying from the entire market for maximal diversification.

For investors concerned about holding money in gun manufacturer stocks, we offer an alternative: our socially responsible investing portfolio, Betterment SRI.

Betterment SRI (read more about socially responsible investing) reduces investment exposure, particularly in large U.S. companies, to weapons and gun manufacturers, in addition to other industries and companies that some wish to avoid. It does this by utilizing ETFs that are pre-screened based on certain social, environmental, and governance criteria.

It’s not a perfect solution. It can be difficult to build an all-satisfying SRI portfolio, both because highly rated SRI funds tend to cost more, and because of the interwoven nature of investments, companies, and specific values.

But, it’s a start. We’re proud of our SRI offering and continue to invest in analyzing and optimizing the portfolio to help you seek strong returns, while taking into account the values that you care about.

To those who wrote us recently, and to those who will write in the future, thank you for pushing us to serve you better. It’s because of you that we’re here, and we’ll continue to work to make Betterment the smart home for your investments.

If you’re interested in opening an account with or switching to a Betterment SRI portfolio, visit the Portfolio tab in your account.

Contributing Authors

Adam Grealish
Director of Investing, Betterment

Seth Styers
Creative & Social Media Lead, Betterment

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