Socially-Responsible, Conscious Stocks/Funds Investing at Brokerage Firms: TD Ameritrade, Vanguard, Fidelity, Etrade, Robinhood, Swell Investing and Charles Schwab 2019

Overview of Socially-Conscious Investing

Traders who are concerned about the business practices of some of the stocks they buy and sell should take a look at socially-responsible funds. These are ETF’s and mutual funds that invest in companies that meet specified criteria, such as an environmental record. Companies that don’t manufacture certain products, like tobacco or firearms, also are candidates for purchase in the socially-responsible investment world. The number of funds that incorporate some type of social, religious, or political outlook has quadrupled in the past decade, with total fund assets now in the trillions.

Purposes of Socially-Responsible Investors

Socially-responsible investing attempts to both make a profit and defend philosophical goals. Accomplishing both objectives at the same time isn’t always easy, which makes this style of trading all the more difficult. Nevertheless, some investors want to make sure their values are protected when making financial decisions.

They can do this by investing either in specific companies or in socially-responsible funds. Today, there are many mutual and exchange-traded funds that incorporate at least one socially-responsible objective. Purchasing a specific business that manufactures a certain product, like solar panels, is another way to make socially-conscious investment decisions.

Socially-Conscious Investing at Fidelity

Fidelity’s mutual fund screener can search specifically for socially-responsible products. It returns 304 securities. They cover a wide swath of investment categories and objectives. Some of them are small blend funds, while others are large growth funds. Some have 4 stars from Morningstar, while others just have 1.

One fund in particular is SPEGX. Alger Responsible Investing Fund only buys and sells companies that have a high environmental, social, and governance (ESG) rating from MSCI. Companies that are involved with alcohol, gambling, weapons, adult entertainment, or nuclear power are automatically excluded. Also on the list is genetically-modified organisms, and this includes genetically-modified foods.

Fidelity Socially Responsible Investing Review

The fund’s stringent standards don’t seem to impress Morningstar, who gives it just 2 stars. SPEGX has a 10-year annualized return history of 0.59%, although its 1-year history is a very impressive 11.46%. The fund has a current dividend yield of 1.13% and total assets of just $33.6 million.

At Fidelity, SPEGX can be purchased with no transaction fee. However, it does have a front-end load of 5.25%. The charge begins dropping with an initial investment of $25,000 or more and reaches zero percent at a million dollars.

Learn more in Fidelity brokerage review.

Socially-Responsible Investments at Charles Schwab

Investors at Schwab can search for socially-responsible exchange-traded funds using the broker’s handy screener. The tool can look exclusively for ETF’s that have noneconomic goals. It returns 48 products in total. Six of these trade commission-free.

One such fund is KLD, iShares MSCI USA ESG Fund. KLD excludes all tobacco companies from its portfolio. Most of the equities the fund owns are US companies. The largest holding is Microsoft, and the fund has an underweight in financials.

Charles Schwab Socially Responsible Investing Review

Morningstar has graded the fund 3 stars. Its performance history has a noticeable degree of volatility in it, returning -35.83% in 2008, and 30.37% in 2009. KLD has half a billion dollars in assets, and an expense ratio of just 0.50%.

Buying the fund at Schwab costs $4.95 per trade. KLD pays a quarterly dividend, and Schwab customers can sign up for a free DRIP service.

Learn more in Schwab brokerage review.

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Socially-Responsible Investing at TD Ameritrade

TD Ameritrade has a nice stock screener that can search using a wide variety of criteria. Socially-conscious is not one of them, although various categories can be selected that are often included in socially-responsible funds. For example, it’s possible to look specifically for companies that manufacture health care products. It’s also possible to exclude equities that are involved in tobacco or the defense industry.

The TD Ameritrade equity screener returns 1,150 health care stocks. These results can be sorted by a variety of criteria, including dividend yield, EPS growth, and S&P Capital IQ rating.

TD Ameritrade Socially Responsible Investing Review

One stock that appears in the broker’s search results is Abaxis, Inc. It trades on the Nasdaq around $47 with the ticker symbol ABAX. It manufactures medical equipment and is classified as a small cap growth stock. has a buy rating on the stock, while Ford Equity Research has a hold, and Credit Suisse rates it as underperform.

The stock currently pays a dividend and is yielding 1.18%. Its 52-week high is $56. Its P/E ratio currently is 32.2, which is rather high. ABAX has slightly underperformed the S&P 500 over a 3-year period.

Purchasing the stock at TD Ameritrade costs $6.95 per transaction. The stock has options currently trading, and those cost 75¢ per contract.


Learn more in TD Ameritrade brokerage review.

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Swell for Socially Conscious Investing

Swell Investing is one of the more interesting entrants into the investment industry. They are not a broker in the traditional sense where you can open an account and trade a variety of securities, but rather they are more of a boutique asset manager offering custom portfolios composed of companies trying to solve the world’s biggest problems - Swell calls this impact investing. The companies they invest in are important global concerns, like renewable energy, recycling, clean water, and green technologies.

How Does Swell Work?

Swell currently offers six unique portfolios that investors can invest in, each with its own unique socially responsible theme, which is evident in the 30 to 60 companies it generally invest in at any given time.

Swell Investing

As a Swell investor, you can allocate your money to just one or to as many of these portfolios as you’d like, and you will always only pay their 0.75% management fee, no commissions or other trading fees. Next, we’ll dive into Swell’s investment approach so you can see what makes them unique.

The Swell Approach

Most active asset managers build their portfolios by starting with the appropriate benchmark they’re trying to beat and then adjusting their portfolio’s holdings based on which companies in the index they feel will perform the best based on either quantitative or fundamental criteria – the primary driver of their investment process is to outperform their benchmark. This is not the case with Swell. Swell’s approach is to first identify the biggest global concerns of our age (i.e. clean water, clean energy, waste removal, etc.) and then to scan thousands of companies to find the ones that are deriving most of their revenue from environmental or social impact.

After identifying the companies that are trying to solve these global issues by incorporating environmental and social impact into their business model, Swell analyzes each company’s financial health, valuation, and liquidity to identify the most attractive investment candidates to add to their portfolios. The ordering of Swell’s approach is very important because the most important part of their process is to identify companies that are solving the world’s biggest problems, and only after this criterion is met does Swell then begin its evaluation of the companies’ financials and profitability.

For example, Swell’s Disease Eradication Portfolio was formed to recognize the global economic impact of some of the world’s most widespread deadly diseases, such as tuberculosis and malaria. These diseases, although not common in the developed world, kill millions every year, putting a strain on global productivity. The companies trying to cure these diseases may not be the most attractive to traditional portfolio managers since drug sales from third world diseases are generally lower, but to Swell and socially conscious investors, these are the exact companies they are looking to support.

Swell Summary

We think Swell is an attractive option for those looking to invest and earn a return while also knowing that their investments are also helping companies solve some of the world’s biggest threats. The 0.75% management fee is in the average range of most mutual funds’ management fees so we see this as a fair price. Furthermore, the advantage of investing in Swell over trying to build your own “impact portfolio” is that they’ve already done the research for you and hand-picked the companies leading the world forward against its biggest threats.

Best Brokers For Socially-Responsible Investing Summary

Investing successfully while defending a code of values isn’t easy. Nonetheless, the trend is growing. Resources are available on-line that make the investment process easier.