Investing with an impact image

Invest with an Impact

Published: March 12, 2019

As a steward of individual and family wealth, Klingenstein Fields Advisors (KF Advisors) understands that growing and protecting your assets is a top priority. We also realize that non-financial considerations, such as beliefs and values, may be equally important to you. An approach that combines the best thinking of KF Advisors, with responsible investing considerations, can provide the potential to achieve your goals while making an impact. This “values-based investing” or “responsible investing” may be something you want to explore.  

Some topics matter to all investors. We analyze investment ideas for issues that may impact the bottom line, or have any potential effect on the value of the investment in the short- or long-term. This work includes quantitative, disclosure-based research on an array of consequential topics including environmental, social, and governance (ESG) issues. (“ESG” and “values-based investing,” are often used interchangeably). Our analysis helps identify risks and determine the appropriateness of a security as an investment overall… regardless of one’s personal views. For example, strong corporate governance and shareholder rights should be important to all investors, regardless of personal values or beliefs. Our process includes understanding and scoring these issues on potential investments.

Customization incorporates your values. Some clients may want a more explicit focus on one or more ESG issues that matter most to them. As always, our first step is to develop an Investment Policy Statement (IPS) and asset allocation framework. This IPS document reflects client goals, preferences, constraints, and unique considerations. Your IPS discussion often includes a more in-depth conversation around the values you want reflected in your portfolio. If you want to incorporate specific values into their portfolio, we review holdings for ESG issues that could be of concern given these specific beliefs. We use the same disclosure-based research process described above, but with a customized view toward your values. This allows us to generate a score for each security, helping to quantify the fit, or lack thereof, with your beliefs. From there we further analyze the potential holdings in the context of the overall portfolio, including how diversification would be impacted if KF Advisors eliminates some positions. Finally, based on our analysis, we:

  • Eliminate investments that conflict with your values;
  • Flag those that could be a potential problem for ongoing monitoring, and/or;
  • Add securities that we believe are better aligned with your values

 

The result is a customized portfolio that considers your beliefs. If you have a specific family mission or area of ESG focus, such as the environment, diversity, human rights, or other area, KF Advisors follows this same process to reflect your mission in your portfolio. Through a disciplined process of responsible investing, we strive to align your investment portfolio with your values, while seeking to produce competitive returns. 

Important Disclosures

This material is provided for informational or educational purposes only and should not be construed as investment, accounting, tax or legal advice. Always consult a financial, tax and/or legal professional regarding your specific situation. This communication is not intended as a recommendation or as investment advice of any kind. It is not provided in a fiduciary capacity and may not be relied upon for or in connection with the making of investment decisions. Nothing herein constitutes or should be construed as an offering of advisory services or an offer to sell or a solicitation to buy any securities or a recommendation to invest in any specific investment strategy. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future returns. The views expressed herein are as of a particular point in time and are subject to change without notice. The information and opinions presented herein are general in nature and have been obtained from, or are based on, sources believed by Klingenstein Fields Advisors (“KF Advisors’) to be reliable, but KF Advisors makes no representation as to their accuracy or completeness. Although the information provided is carefully reviewed, KF Advisors cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided. KF Advisors represents two investment advisers registered with the Securities and Exchange Commission: Klingenstein, Fields & Co., L.P. and KF Group, LP. If you are a KF Advisors client, please remember that it remains your responsibility to advise KF Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.