Every dollar you invest has an impact. Do you know what yours is?
Sallie:
Hey everyone, it’s Sallie Krawcheck, CEO of Ellevest, and I’m jumping out of my skin to tell you about something new we’re launching here at Ellevest for our private wealth clients.
They’re called Ellevest Intentional Impact Portfolios, and they’re available only at — you guessed it — Ellevest. It’s a whole new way of investing, and it shifts your money from companies that have products, policies, and practices that can harm women and into companies that meet our criteria for advancing women.
This includes diverse leadership and equal pay, of course, but there’s more. Because when companies have poor practices around things like greenhouse gas emissions, workplace safety, guns, exploitative products, human rights — these things affect us all, but they affect women more.
I’m so excited about this that I actually wanted to call it “Ellevest Do the Damn Thing Investment Portfolio,” but the team overruled me. I’ve never seen anything like the level of data sophistication and thoughtfulness around aligning one’s portfolios with their values.
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Ellevest Intentional Impact Portfolios are separately managed equity accounts that are sub-advised by Ethic, Inc., an SEC-registered investment advisor. As sub-advisor, Ethic constructs and manages portfolios of individual stock positions benchmarked to an underlying index and customized to specific values criteria. The sub-advisor seeks to deliver equity market returns that track closely with a designated equity benchmark (domestic and / or international) while outperforming on impact across key sustainability criteria as defined by Ellevest and / or the client.
Ellevest Intentional Impact Portfolios are expected to comprise around 300 US-listed equities (including ADRs as applicable) chosen through an outsourced multi-factor optimization software and sustainability data science developed by Ethic to minimize tracking error.
The sustainability criteria is based on risks in the following categories: Ethics and Fraud, Greenhouse Gas Emissions, Exploitative Products, Product Quality and Safety, Working Conditions, Labor Relations, Workplace Diversity, Waste, Water, Human Rights and Community, War, Firearms, Low Employee Representation (gender), Low Management Representation (gender), Low Board Representation (gender).
The primary benefit of Ellevest Intentional Impact Portfolio is that it provides broad market exposure with a goal of keeping average tracking error low over the long term, less than 1.50%, while divesting from companies that do not meet the strategy’s sustainability parameters. The tracking error may be meaningfully higher if the equity allocation is transitioned over time due to tax or other considerations.
Some of the key risks for the investing in Ellevest Intentional Impact Portfolio include:
Market Risk
As with all publicly traded securities, the SMA is exposed to market risk, the risk of losses arising from fluctuations in market prices caused by factors independent of a security’s particular underlying circumstances.Active Risk
Although the SMA is constructed to minimize tracking error relative to its benchmark, there is no assurance that the strategy will generate market returns within the estimated tracking error. Because the SMA is designed to capture investment returns associated with gender diversity, and high environmental and governance standards, the SMA may exclude, overweight, or underweight individual companies and/or sectors of the market. As a result, the SMA will not fully participate in the market returns of a general investment strategy. The SMA may over or under perform a general market strategy.Sub-Advisor Risk
The success of an account’s investment through sub-advisors is subject to a variety of risks, including those related to the quality of the management of the sub-advisor and the ability of such management to develop and maintain a successful business enterprise, and the ability of the sub-advisor to successfully execute, operate, and manage the intended strategy at or below the target tracking error.Business Risk
The fund’s strategy relies on key personnel, their expertise, relationships and networks. A loss of one or more key personnel may adversely impact the strategy.Ellevest Intentional Impact Portfolios give clients access to broad equity market exposure. The target tracking error for the Portfolios is under 1.50%. Reporting on Ellevest Intentional Impact Portfolios will be provided to clients no less than annually.
The minimum investment in Ellevest Intentional Impact Portfolio is $250,000. In addition to Ellevest’s advisory fee, the client will pay 0.25% of assets managed to the sub-advisor.
All opinions and views expressed by Ellevest are current as of the date of this writing, for informational purposes only, and do not constitute or imply an endorsement of any third party’s products or services.
The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice.
The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person.
Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time.
All opinions and views expressed by Ellevest are current as of the date of this writing, for informational purposes only, and do not constitute or imply an endorsement of any third party’s products or services.