IA Socially Responsible Investing

Ethical Leadership

Managed by IA Socially Responsible Investing

Strategy:
Socially Responsible Investing
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Management fee:
0.11%
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Sharpe ratio:
-
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Minimum investment:
$100
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Portfolio risk score:

The Ethical Leadership Portfolio is designed to invest in companies that follow best-practice corporate governance, competitive behavior, and risk management principles, and provide equal treatment of stakeholders. We include in this portfolio companies that demonstrate management’s ability to interact with regulators, resolve conflict between corporate and societal interests, act responsibly in times of crises, and avoid anti-competitive behavior, such as collusion, fraud, and corruption.

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Research

We use detailed third party data for business classification and Environmental Social and Governance (ESG) metrics in our portfolio screening and construction process. We use data from multiple vendors - one vendor that evaluates company disclosed data in annual reports, exchange filings and company websites, and another vendor that gleans information parsed from trade blogs, industry publications and social media using natural language processing and artificial intelligence algorithms.

We include companies with above average leadership and governance composite scores including risk management, business ethics, competitive behavior, and management of the legal & regulatory environment. We exclude companies with the highest levels of business ethics controversies.

Approach

The portfolio is constructed using a rules-based algorithm to determine position allocations. Allocations are weighted based on how well they score on the particular Socially Responsible Investing (SRI) metric. The portfolio is rebalanced quarterly.

Allocation discipline

The portfolio includes companies that satisfy the criterion laid out in the Research section. Due to the various filters employed, several of which do not relate to financial criterion, the name count may be lower, and sector concentration higher, than other broadly diversified portfolios. Typically, any single stock will have weights lower than 10%. The number of holdings in the portfolio vary over time, but are typically in the 20 to 50 range.

Sell discipline

Sell decisions are based only upon the quarterly rebalance criteria. Every quarter the portfolio is rebalanced to target weights.

Exceptions

Positions in stocks undergoing corporate actions may be sold or adjusted.

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Estimate your costs

Investment
Initial costs
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Annual costs
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Notes on costs
All costs shown are estimated.
Projected costs shown are based on estimated turnover and average price per share. Actual turnover and share prices might vary leading to higher or lower initial and annual costs.
Annual costs are the costs to manage the investment plus the estimated trading commission to re-balance the portfolio, estimated on an annual basis.
Initial costs are the estimated trading commissions incurred in establishing the portfolio.

  • All performance information is of the Portfolio Manager account, net of the current management fee. Client account performance could differ. A client invested when a higher management fee applied experienced lower returns than displayed here. This information was calculated up to April 13, 2021. Performance, composition and volatility could vary significantly from that of the benchmark(s), which are provided for illustrative purposes only.

    Performance

    Last 30 days 0.2%
    Last 90 days 9.0%
    Last 365 days -
    Since inception 49.5%
    2021 (YTD) 15.5%
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IA Socially Responsible Investing

About IA Socially Responsible Investing

Interactive Advisors is a pioneer in online investing. Interactive Advisors offers a variety of portfolios, including the Socially Responsible Investing portfolios, which are managed by Interactive Advisors's Chief Investment Officer and Investment Management team.

The “Socially Responsible Investing” approach to portfolio construction is designed to invest in companies that operate businesses with socially desirable products and services as well as the incorporation of ESG factors into investment decision-making, thus incentivizing better practices from the companies.

Portfolios are constructed using a rules-based approach and offered at a relatively low cost.

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Important Information
  1. This portfolio was launched on Interactive Advisors on July 16, 2020. On that date, Interactive Advisors started trading its own funds in a brokerage account trading this strategy. This portfolio was opened to client investments on July 16, 2020.
  2. Past performance is no guarantee of future results, and all investments, including those in this portfolio, involve the risk of loss, including loss of principal and a reduction in earnings.
  3. This portfolio uses an ESG investment strategy. Such a strategy could limit the types and number of investment opportunities available to this portfolio, lead the portfolio to underperform a portfolio without an ESG focus or with a distinct ESG focus, and result in the portfolio investing in securities or industry sectors that underperform the market as a whole or foregoing opportunities to invest in securities that might otherwise be advantageous to invest in. Interactive Advisors could also be unsuccessful in creating a portfolio composed of companies that exhibit positive ESG characteristics.
  4. To invest in this portfolio, Interactive Advisors clients must:
    • Sign an Investment Management Agreement with and become clients of Interactive Advisors;
    • Consent to trading with another Interactive Brokers LLC client who is a liquidity provider in order to be able to buy and sell fractions of stocks, which do not trade on the open market. Clients may revoke this consent at any time but, if they do, they will no longer be able to invest in this portfolio. (Clients can see these fractional trades with the liquidity provider listed and identified on the periodic activity statements they receive from Interactive Brokers LLC); and
    • Obtain the minimum risk score required for each portfolio and acknowledge certain risk disclosures.
  5. Interactive Advisors manages this portfolio by trading its own funds in a separate firm-owned brokerage account and replicating this trading in the accounts of investing clients as follows:
    • Interactive Advisors initially funds and trades a fixed amount of its own funds in a separate brokerage account associated with this portfolio;
    • Interactive Advisors replicates the trading in this brokerage account in the accounts of clients investing in this portfolio in order to implement its replication-based investment process; and
    • Interactive Advisors periodically rebalances this portfolio, resulting in rebalacing transactions in investing clients’ accounts.
  6. The actual performance of the manager account displayed on this page is based on the performance of an Interactive Advisors proprietary account invested using this strategy and is calculated by Interactive Advisors on a daily time-weighted basis, including cash, dividends and earnings distributions. The actual performance for this portfolio is presented “net of fees” and reflects the deduction of the Interactive Advisors advisory fee, Interactive Brokers LLC brokerage and other commissions and expenses that a client has to pay if he invests in this portfolio after the launch date.
  7. None of the performance information displayed on this page is based on the actual performance of any Interactive Advisors client account investing in this portfolio. The performance in an Interactive Advisors client account invested in this portfolio may differ (i.e., be lower or higher) from the performance of the Interactive Advisors account managing this portfolio and portrayed on this page based on a variety of factors, such as trading restrictions imposed by the client (resulting in different account holdings), time of initial investment, amount of investment, frequency and size of cash flows in and out of the client account, applicable brokerage commissions, and different corporate actions. Clients investing in this portfolio may view the actual performance of their investment in this portfolio by logging into their Interactive Advisors account and reviewing their customized dashboard.
  8. Clients may restrict any of the securities traded in their account, but should note that any restrictions they place on their investments could affect the performance of their account leading it to perform differently, worse or better, than (a) Interactive Advisors’ account managing the portfolio or (b) other client accounts invested in the same portfolio.
  9. All graph data is as of the end of day for the referenced period, unless otherwise specified. The investment minimum is the minimum investment required to invest in a particular portfolio. The minimum amount is determined by Interactive Advisors, based on the characteristics of the underlying portfolio. It should not be considered as specific investment advice for your investment situation.
  10. The actual performance chart is provided for informational purposes only, and should not be used as the basis for making an investment decision. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors (Refinitiv Worldscope database) to provide these returns. Neither Interactive Advisors nor any of its data or content providers shall be liable for any errors in this information or any actions taken by you in reliance upon this information.
  11. Interactive Advisors’ management of this portfolio and some of the information on this page relies on data from third-party sources, including third parties providing ESG score information. While Interactive Advisors believes the data is uses in its investment management processes is obtained from reliable sources, it did not audit or validate this data, which may contain errors.
  12. Benchmark returns displayed have been calculated by Interactive Advisors using daily adjusted close prices and include dividend income. More information here. Interactive Advisors uses only investable ETFs as benchmarks. Investable ETF returns reflect the deduction of (i.e., are net of) management fees, transaction costs and expenses.
  13. Transaction history is available upon request. Portfolio classifications are provided by Interactive Advisors, and are intended to serve as a general guide.
  14. Not all transactions listed on this page or underlying the performance information displayed on this page will appear in accounts due to Interactive Advisors’ trading rules and individual client constraints. Eligibility of these securities is monitored periodically, and may change over time. Actual client investment holdings may vary.
  15. Quarterly rebalances in this portfolio will result in numerous transactions in many of the stocks held in this portfolio and client accounts investing in this portfolio. Clients will incur transaction costs for any trading in their account (including periodic rebalance trades) such as commissions payable to Interactive Brokers LLC, Interactive Advisors’ affiliated broker-dealer, which is a conflict of interest. Clients could be required to report some or all of these periodic rebalance trades on their tax forms. Clients should consult an accountant or tax attorney on tax matters as Interactive Advisors does not provide tax advice or prepare tax documents for its clients. Interactive Brokers LLC provides certain tools to assist you with your tax filings, but these tools may only be able to support a limited number of trades.