Socially Responsible Funds added to your portfolio

Socially Responsible Funds added to your portfolio

| July 20, 2020
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As part of our commitment to positive social impact, next month we are adding a new fund to client accounts valued over $30,000. This addition supports the cause to make our world a better place and provides enhanced performance to our portfolios.

We selected the Vanguard FTSE Social Index Admiral (VFTAX) mutual fund to begin our transition toward more socially and environmentally sustainable funds because it is one of the lowest cost, best-diversified U.S.-focused socially conscious funds available. VFTAX effectively balances diversification against its mandate to avoid controversial lines of business and should deliver similar performance to the broad U.S. large-cap market over the long term. This strategy earns a Morningstar Analyst Rating of Silver, meaning that it's in the top 70% of its peers.

Unlike many peers that target stocks with positive environmental, social, and governance characteristics, this fund relies on negative filters. It starts with all large- and mid-cap U.S. stocks and excludes those involved in controversial businesses such as fossil fuels, tobacco, alcohol, nuclear power, adult entertainment, and gambling, as well as firms that don’t take adequate steps to promote diversity. Notably, there are no corporate governance screens, which are likely more closely tied to immediate business performance than environmental and social practices. Qualifying stocks are weighted by market cap, which limits turnover and reflects the market’s view about the value of each holding. These screens introduce a slight growth tilt and some modest though persistent sector biases.

Please reach out to us if you have any questions or would like to learn more about this fund and others that we plan to introduce later this year.

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