World-wide threats from global warming, the COVID pandemic, and social inequality call for change. The priority shift has led investors to evaluate their portfolios.
It's an investment strategy that focuses on corporate social responsibility, it’s considered an extension of philanthropy.
Impact investing can be confused with the former two. However, they’re easy to distinguish by their priorities.
The ESG investor wants to see companies that are addressing all three factors. While the socially responsible investor centers on social factors and the impact, investors pick any one cause.
Investors will find impact investments across asset classes and sectors, including healthcare, education, agriculture, technology, energy, microfinance, housing, etc.
Stocks are a type of security representing ownership of a fraction of a company. Stocks are bought and sold on the stock market and private exchanges.
ETFs are cost-effective publicly traded funds. They minimize risk by pooling multiple stocks across sectors and asset classes.