Impact Investing

Impact Investing Overview:

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At Magellan Financial, we help both individuals and institutions invest in a more socially conscious manner.

What is Impact Investing?

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Impact Investing, also known as Socially Responsible Investing (SRI), is not the same thing to everyone. It can best be described as an investment in governments and private sector firms that investors believe hold value of importance to the impact investor. There are a number of factors that come up with many socially conscious investors, including:

• Environmental Concerns
• Consumer Protection
• Religious Beliefs
• Human Rights

The financial advisors at Magellan Financial have the experience to handle any of your needs or concerns.

How Does Impact Investing Work?

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Impact Investing can be done in either a passive or active manner. A passive fund manager would screen for companies and/or governments that are currently making decisions that meet their specific criteria. The active manager would be more interested in shareholder advocacy, making proactive decisions on investments to influence corporate decision making.

How Do Funds Screen for Impact Investing?

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Negative Screen

There are a number of methods an investment advisor will screen for investments. The first and very common way is through a negative screen. Not investing in Tobacco stocks is an example of a negative screen. Similar to the negative screen is divestment or removal of an individual stock or group of stocks for non-financial reasons.

Positive Screen

The opposite of this would be the positive screen, where a fund manager invests in individual companies or sectors that generate social returns. The purchase of solar stocks or wind stocks would be an example of a positive sector screen. The purchase of a trucking company that is actively looking to reduce its carbon footprint would be an example of a positive screen purchase of an individual equity.

How Can the Average Investor Socially Invest?

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Step One:

The first step in Impact investing is deciding on your motivation. Do you care about generally better environmental policies or are you more interested in specific areas of the market like solar power? Are there specific investments you would like to avoid based on environmental or social criteria? Or would you prefer to invest with a religious belief system?

Step Two:

The next step is deciding on how to invest. Trying to piece together a socially conscious portfolio is a time-consuming affair. An individual investor would need to have the time, knowledge and resources to develop their own research and screening process to develop their own stock portfolio. Very few people have the ability or desire to do this on their own, so that’s why here at Magellan Financial, we take the time to both help and educate you, the client, on Impact Investing.

Step Three:

Fortunately, with the increased interest in Impact Investing, this is not necessary as there are many great investment options available today. Specific investment vehicles available include:

• Mutual Funds
• Exchange Traded Funds (ETFs)
• Separately Managed Accounts

With the knowledge and research from your financial advisors, you can find the investment(s) that best meets your criteria.

Interested in Impact investing? Contact our team of Financial Advisors today to make a positive impact on tomorrow.

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Sustainable investing focuses on companies that demonstrate adherence to environmental, social and corporate governance principles, among other values. There is no assurance that social impact investing can be an effective strategy under all market conditions. Different investment styles tend to shift in and out of favor. In addition, a strategy’s social policy could cause it to forgo opportunities to gain exposure to certain industries, companies, sectors or regions of the economy which could cause it to underperform similar portfolios that do not have a social policy. A socially responsible investment style may shift in and out of favor.

Wells Fargo Advisors / Wells Fargo Advisors Financial Network] did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the author(s) and are not necessarily those of [Wells Fargo Advisors / Wells Fargo Advisors Financial Network] or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.