Socially Responsible Investing — Doing good and also doing well.

Steve Lear |

Our clients have long shown an interest in socially responsible investing, and we’ve worked to accommodate these requests individually over the years. It only makes sense that we would, seeing how well socially responsible investing fits with our mission: working to make people’s lives better.

But in the past, the best we could do was replace the occasional investment with something with a higher “social score.” Today, advances to socially responsible investing opportunities, as well as an initiative by the Affiance Financial Investment Committee, have allowed us to create our first complete stock/bond portfolio solution for socially responsible investing — the Affiance Financial Sage Portfolios.

Socially responsible investing means different things to different people. To some, it means avoiding companies that produce or sell addictive substances. To others, it means investing in companies that engage in social justice. Still to others, it brings to mind environmental or religious causes. In fact, socially responsible investing can incorporate all of these ideals.

Historically, socially responsible investing has faced three major challenges — availability, cost, and performance. In the past, there simply weren’t enough socially responsible funds available for us to build a complete portfolio on par with our traditional portfolios. This was especially true of bond funds. The social funds that were available tended to be more expensive than traditional funds, often without performing as well. This is no longer the case.

Today, a large number of socially responsible funds are available, which has allowed us to be selective and build the Sage Portfolios in a way that mirrors our existing traditional portfolios. This was a must for ensuring that the Sage Portfolios took a risk-based approach to portfolio construction, in alignment with our firm’s investment philosophies. But, it was also important for allowing our Investment Committee to monitor and maintain the Sage Portfolios in a thorough and efficient manner.

The Sage Portfolios include all the same diversified asset classes — U.S. stocks, International stocks, balanced funds, bonds, and cash — as our traditional portfolios. And, like our traditional portfolios, they include a mix of fund families as well as active and passively managed mutual funds. In addition, the Sage Portfolios were constructed with cost in mind, allowing them to be competitive with traditional Affiance portfolios.

Equally important when constructing the Sage Portfolios, was choosing investments that were socially responsible. The main criteria the Investment Committee used was to require that all selected funds have a specific social mandate, rather than simply a high “social score.” Having a social mandate means the funds were created according to, and are required to continue to follow, specific criteria based on socially responsible guidelines. It is our hope that now, socially-conscious investors will have a portfolio choice that they can feel good about.


The performance of Sage Portfolios will vary from the traditional portfolio due to differences in the underlying holdings. The return and principal value of investments fluctuate with changes in market conditions. Investors should consider the investment objectives, risks, charges, and expenses when investing. The views represented are not meant to be construed as advice. Moreover, no client or prospective client should assume that this content serves as the receipt of, or a substitute for, personalized advice from Affiance Financial, or from any other professional.