Investing For Maximum Impact
Today's investors are using their portfolios to change the world — without losing return potential.
Impactonomics® is a broad term that incorporates investing in companies, organizations and funds with the intention of creating not only profit but also environmental and social impact.
— Chief Investment Officer, Bank of America Global Wealth & Investment Management
IMPACT INVESTING HAS RAPIDLY EVOLVED. When it first came into vogue nearly 30 years ago, the idea was largely met with skepticism. Investments that hinged on values were considered philanthropic gestures practiced by a handful of investors trying to make a statement. Many values-based investors used strategies that depended on avoidance: Effect change by screening out companies and products they saw as negative, such as alcohol or tobacco. But that technique limited investments and created portfolio gaps
Over the last decade, impact investing has reached the next level, partly due to investors' views of our interconnected economy, combined with greater sophistication in tracking and analysis of markets. Investors are helping to drive the era of "conscious consumers," who are shopping at organic stores, buying goods from companies with clear social missions and driving cars that are environmentally friendly.
Understanding Impact Investing
With Chris Hyzy, Chief Investment Officer, Bank of America Global Wealth & Investment Management And Moderator Ron Insana
Please see important information at the end of this program.
MR. INSANA: Impact investing, something that's quite popular with Millennials. It used to be called socially conscious investing or something like that. It's changed form to a certain extent, so what exactly does it mean?
MR. HYZY: We call it Impactonomics® and it's the way to garner and utilize impact investing at the same time of helping the broader community and the economy all at the same time. From that standpoint, it's very different. Social screening, prior years, was about negative screening, taking things out; now it's about positive screening.
Sometime in the very near future the word 'impact investing' will just be 'investing' because at some point it's going to get to a level if you're not doing that, you're not a part of the opportunity set at all. So, our counsel is, is let's do good inside portfolios at the same time we're making the impact outside of a portfolio. Bridge those two concepts together, and for the first time in many, many years you can really do that.
IMPORTANT INFORMATION
The views and opinions expressed are those of the speakers, are subject to change without notice at any time, and may differ from views expressed by Merrill Lynch or other divisions of Bank of America. These discussions are provided for informational purposes only and should not be used or construed as a recommendation of any service, security or sector.
The investments or strategies presented do not take into account the investment objectives or financial needs of particular investors. It is important that you consider this information in the context of your personal risk tolerance and investment goals. Due to the time-sensitive nature of the content and because investment opinions may have changed since the time any comments were made by research analysts, the latest Merrill Lynch investment opinion and investment risk rating for any particular security discussed should be reviewed, including important disclosures, before making an investment decision.
Social impact investing is a relatively new and evolving investment opportunity which is highly speculative and involves a high degree of risk. An investor could lose all or a substantial amount of their investment.
The information presented here is not intended to be either a specific offer to sell or provide, or a specific recommendation to buy any particular product or service.
Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.
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Chris Hyzy, chief investment officer for Bank of America Global Wealth & Investment Management, discusses how investors can use what he calls Impactonomics® to benefit society at large.
Social impact investing is a relatively new and evolving investment opportunity which is highly speculative and involves a high degree of risk. An investor could lose all or a substantial amount of their investment.
