Merrill Lynch and Merrill Edge today launched five new portfolios incorporating environmental, social and governance (ESG) factors in response to growing demand for investments with the potential to produce positive societal outcomes without sacrificing financial returns.1
Designed by the Global Wealth and Investment Management (GWIM) Chief Investment Office (CIO), the new CIO Core Impact Portfolios incorporate the CIO’s disciplined investment process, portfolio construction views, portfolio management and oversight routines.
They consist primarily of exchange-traded funds (ETFs) and require a minimum investment of $5,000. The five portfolios model investor profiles ranging from conservative to aggressive. These offerings expand upon an existing array of impact offerings on both the Merrill Lynch and Merrill Edge platforms.
“The demand for ESG-integrated investment options has increased as more investors are seeking a ‘double bottom-line’ approach to investing and a way to add an environmental or societal impact objective to a financial return,” said Chris Hyzy, chief investment officer for GWIM.
“These new portfolios are part of the ongoing expansion of our investment offerings and build upon a broad platform of both solutions and thought leadership in the impact arena,” added Keith Banks, vice chairman of GWIM and head of the CIO and the Investment Solutions Group for Merrill Lynch and U.S. Trust.
Impact investing is a way for clients to align their investments with their values while seeking competitive returns.1 Impact investing in the U.S. has gathered momentum over the last two years. According to the Forum for Sustainable and Responsible Investment, $8.72 trillion was invested in impact-related investments at the start of 2016, an increase of 33 percent since 2014.2 Interest is particularly strong among younger investors and women, studies have found.3
Millennials have the highest proportion of assets deployed in ESG-oriented strategies and also have the greatest interest in adding exposure to these strategies; approximately 90 percent either engage in impact investing or want to. This group alone could drive $15-$20 trillion of inflows over the next two to three decades, roughly doubling the size of the U.S. equity market.4
Bank of America Corporation has broadly embraced a commitment to responsible growth and ESG leadership throughout its eight lines of business, seeking sustainable growth and finding innovative ways to deploy capital to address global challenges, including climate change, clean water, affordable housing, and others.
Recognizing the power of financial capital to make a positive environmental impact, the company has committed to deploy $125 billion in financing by 2025 to accelerate the transition to a low-carbon, sustainable economy. From 2007 through 2017, Bank of America Merrill Lynch has been the No. 1 underwriter of green bonds globally.5 As of March 31, Bank of America Corporation’s investment businesses had more than $16.2 billion in client balances with a clearly defined ESG approach.6
Over the last three years, the company has strengthened its ESG focus, putting renewed emphasis on implementing ESG policies that create jobs, transform communities, foster economic mobility and seek solutions and opportunities to help families, businesses and communities prosper and thrive.
For more information about impact investing, please visit www.ML.com/impactinvesting or www.MerrillEdge.com/impactinvesting. The new portfolios will be available through Merrill Lynch and Merrill Edge financial advisors.
1 Impact investing and/or environmental, social and governance (ESG) managers may take into consideration factors beyond traditional financial information to select securities, which could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. Further, ESG strategies may rely on certain values-based criteria to eliminate exposures found in similar strategies or broad market benchmarks, which could also result in relative investment performance deviating.
2 U.S. SIF Foundation, Report on U.S. Sustainable, Responsible and Impact Investing Trends 2016, November 2016
3 The Cerulli Edge®, 3Q 2016, Issue No. 4, the Gender and Advice Issue
4 BofA Merrill Lynch Global Research “ESG: Good Companies Make Good Stocks,” Equity and Quant Strategy, December 18, 2016
5 Environmental Finance Green Bond Database at http://www.greenbonddata.org
6 Source: GWIM Finance, Bank of America Corporation as of March 31, 2018
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