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.
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 Sep 28, 2022.
Performance, composition and volatility could vary significantly from that of the benchmark(s), which are provided for illustrative purposes only.
Performance
| Last 30 days | -8.8% |
| Last 90 days | 3.3% |
| Last 365 days | -6.8% |
| Since inception (annualized) | 19.3% |
| 2022 (YTD) | -12.0% |
| 2021 | 29.6% |
Risk metrics (last 365 days)
| Volatility | 21.0% |
| Sharpe ratio | -0.49 |
| Sortino ratio | -0.69 |
| Maximum drawdown | -19.3% |
| Value-at-risk (95%, 1 week) | -4.9% |
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Portfolio information
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.
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.
Sell decisions are based only upon the quarterly rebalance criteria. Every quarter the portfolio is rebalanced to target weights.
Positions in stocks undergoing corporate actions may be sold or adjusted.
About IA SRI
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.
Disclosures
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.
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. All performance information on this page is actual performance of the Interactive Advisors proprietary account and presented “net of fees”. The actual performance chart is provided for informational purposes only, and should not be used as the basis for making an investment decision. Actual client returns will differ.
The ESG variants of the Smart Beta and Asset Allocation Portfolios and the Socially Responsible Investing portfolios use an Environmental, Social and Governance (“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 investing in stocks of companies or ETFs made up of companies that exhibit positive or favorable ESG characteristics and the ETF manager (or the provider of the index the ETF seeks to track) may not succeed in selecting issuers that exhibit positive or favorable ESG characteristics in constructing the ETFs.
Additional information on the risks, conflicts of interest, applicable brokerage commissions, fractional shares, and limitations on investments and divestments associated with this portfolio can be found here and on the Forms and Agreements page.