Betterment Climate Impact, The Betterment Climate Impact portfolio replaces the International Developed Bond exposure and the US High Quality Bond exposure in the Betterment Core portfolio with investments in global green bonds. These investments meet MSCI’s definition of green bonds, which includes funding for alternative energy, pollution prevention, sustainable water, and climate adaptation. You should check MSCI’s definition before investing. The Betterment Climate Impact portfolio includes an additional 10% green bond allocation to diversify the portfolio.
Betterment’s Climate Impact portfolio
During a recent podcast with FTI Consulting’s Hamm Hooper and Ryan Windels, Betterment’s CEO discussed the company’s new Climate Impact portfolio. She explained that the company is responding to the needs of climate-conscious investors by creating ESG-compliant portfolios that focus on the environment. This new approach provides investors with more flexibility than ever before. Sarah Levy’s background includes roles at Disney, Viacom, and FTI Consulting. She has extensive experience in managing global strategy, finance, and operations, and has overseen the growth of several media companies.
Engagement-based socially responsible ETFs
The Climate Impact portfolio of Betterment incorporates an allocation of engagement-based socially responsible ETFs into its portfolio. The portfolio includes global green stock ETFs, fossil fuel reserve-free ETFs, and bonds with socially responsible practices. This includes the company’s own ESRIs (environmental, social, and governance), as well as several others. The portfolio is designed to offer investors the opportunity to impact the world by investing in companies that demonstrate their commitment to social responsibility.
Low-cost sustainable ETFs
The Betterment climate impact portfolio is the latest in its socially responsible investment offerings. It includes both low-cost sustainable ETFs and a broad impact fund. Despite the new focus on climate change, the firm is not sacrificing its portfolio diversification or balance of costs. Instead, this portfolio targets strategies for reducing global warming and improving social equity. Those who participate in the Betterment climate impact portfolio are young investors who are starting to enter the investing game.
While the Betterment climate impact portfolio is fairly new, it already boasts a number of features that differentiate it from the competition. These include the CRBN index, which tracks the global stock market but emphasizes companies with low carbon emissions. It also includes funds that exclude fossil fuel companies, as well as “green bonds,” which fund environmentally beneficial projects around the world, such as energy efficiency, pollution control, and climate adaptation. Compared to other robo-advisors, Betterment’s Climate Impact portfolio has a 50% lower carbon footprint than its core portfolio. The investment fees are a relatively low 0.5 percent, which makes Betterment a clear leader in the field.
The Climate Impact portfolio from Betterment includes 50% of its stock basket in the “CRBN” index. This index emphasizes companies with low carbon footprints, such as renewable energy. The portfolio also includes “green bonds” and climate-aware alternative energy projects. In total, this portfolio has a 50% lower carbon footprint than the Betterment core portfolio. It’s a clear leader in robo-advisor ratings.