MFA has focused on impact investing for a number of years now, but to date has only made very targeted investments in areas like low-income housing finance and microfinance. We have avoided broader allocations to impact investments, as many of the publicly-offered mutual funds and exchange-traded funds (ETFs) were either poorly constructed, expensive, or required other unattractive trade-offs.
However, investor interest has been building for years and seems to have finally reached a tipping point recently. We are now seeing an explosion of new products, as well as fee reductions on existing products. Consequently, for the first time, investors are now able to construct an impact portfolio of global equities with publicly-offered funds that are both low cost AND closely track the major benchmark indices.
Nearly all impact strategies screen out objectionable products and industries (such as tobacco or cluster munitions) and incorporate non-financial considerations into their shareholder voting, but we recognize that different clients prioritize values differently. We are happy to announce that we will be offering two main strategies:
- A broad-based ESG strategy that tilts towards companies with superior Environmental, Social, and Governance (ESG) practices.
- An environmentally-sustainable strategy that focuses primarily on environmental factors, such as greenhouse gas emissions, fossil fuel reserves, and other sustainability considerations from land use to water management.
We will be publishing more information in the coming months, but feel free to reach out if you are interested or would like to learn more.