August 19, 2013
By Mason Braswell
“One of the most pronounced trends we’ve seen in recent years is the call for wealth to have a productive impact on our environment, our communities, and our society broadly , in addition to earning an investment return,” said Andrew Sieg, the head of the global wealth and retirement solutions at Bank of America Merrill Lynch, in a statement. “This program offers opportunities for a wide range of investors with diverse interests and beliefs to help meet this need.” [EXPAND Read more]
Around a quarter of the approximately 15,000 advisors at Merrill Lynch Wealth Management were looking to expand their sustainable investment offerings for clients, according to Jason Baron, a portfolio manager who has been developing socially responsible strategies for the firm.
Younger generations were driving that demand as 29% of millennial investors reported that the ability to provide values-based investing was an important factor in selecting a wealth management firm, according to a survey by Merrill Lynch Private Bank and Investment Group. Environmental concerns were often the top priority, said Chris Wolfe, the chief investment officer at Merrill Lynch Wealth Management’s Private Banking and Investment Group.
In response, the firm has launched two investment strategies so far this year that are tailored to environmental, social and governance themes. The U.S. Trust division, which caters to some of the firm’s wealthier clients, launched the Environmental Stewardship and Sustainability strategy, which screens investments by energy practices, carbon footprint reduction and process efficiency.
Bank of America also deployed a program called Socially Innovative Investing across its U.S. Trust and Merrill Lynch Wealth Management divisions. That strategy, which allows clients to customize their own selection criteria for investments, had some $600 million in assets as of March of this year, the firm said.
Together, Merrill Lynch Wealth Management and U.S. Trust offer 180 sustainable investment options that can be accessed through a mix of proprietary and third-party mutual funds, ETFs, separately managed accounts and alternative investments.
Prices for socially responsible products were “in-line” with industry averages for actively managed accounts, Wolfe and Baron said. [/EXPAND]