Plum Street Advisors
Socially Responsible Investing Update – February 20, 2020

It’s been an active start to the year for socially responsible investing, both for us at Plum Street Advisors and across the investment management industry. 

In January, the CEO of Blackrock (the world’s largest asset manager) made several important climate-related announcements.  He set ambitious goals for his company’s growth in socially responsible funds, but even more importantly he announced they were broadly disinvesting from all companies that get more than 25% of their revenue from coal production across all of their investment products, as well as using their massive scale to vote against boards at companies that haven’t made enough progress in climate-related disclosures. 

Blackrock’s letter was soon followed by a letter from the CEO of State Street Global Advisors (the world’s fourth largest asset manager), which also vowed to broadly vote against the boards of companies that lag behind on environmental, social, and governance (ESG) standards. 

Overall, ESG-specific mutual funds and ETFs had a record year in 2019, with over $20 billion of new money flowing into them.  That is almost four times the amount in 2018, showing that ESG investing is becoming a larger part of investor’s portfolios:

      Source: Morningstar Direct


Plum Street ESG Update

Our long-term expectation is that ESG portfolios will behave comparably to their non-ESG peers (i.e. the overall market), but Plum Street’s first all-ESG portfolio hit the 3-month mark at the end of January, and it’s off to a good start by slightly outperforming broader indexes over this period.  The 3-month cumulative return of the portfolio was 3.7%.  This return compares favorably to the Morningstar Moderate Risk benchmark return of 3.6% over the same period.

The portfolio holds a very diversified mix of stock and bond funds and covers US, International, and Emerging Markets. The strongest performers among the portfolio’s top 10 stock holdings were US-based stocks, led by electric car maker Tesla which returned over 100% over the three month period, and followed by technology stocks like Apple (up 25%) and Microsoft (up 19%).

Thanks to all of you that have indicated interest in socially responsible investing, and we look forward to continuing to discuss these options with all of our clients.  At Plum Street Advisors, we can build a customized implementation of socially responsible investments – from tilts toward lower carbon-emitting companies to the all-ESG portfolio discussed above.



David Dirks and Jamie Osborn
Founding Partners




General Disclaimers

Certain information herein is based on data provided by third party sources and, although believed to be reliable, has not been independently verified, and its accuracy or completeness cannot be guaranteed. There is no guarantee of performance, and past or projected performance is not a reliable indicator of future performance. Future performance may be materially different than past performance, causing substantial or total loss of investment. Actual returns will be less due to advisory fees and other brokerage or custodial costs. No representation or warranty is made as to the reasonableness of the assumptions made or that all assumptions used in achieving the returns have been stated or fully considered.

The Morningstar Moderate Risk benchmark is designed to meet the benchmarking needs of target risk investors by offering an objective yardstick for performance comparison covering moderate equity risk preferences.

Benchmarks are shown for illustrative purposes only, may not be available for direct investment, are unmanaged, assume reinvestment of income, do not reflect the impact of any advisory fees and have limitations when used for comparison or other purposes because they may have different volatility or other material characteristics (such as number and types of instruments).

This presentation is general in nature and should not be construed as a provision of personalized legal or tax advice, recommendations regarding investment advisory services, or the solicitation to effect or attempt to effect transactions in securities. Neither the US Securities and Exchange Commission nor any state securities regulatory authority has reviewed, approved, or passed upon this presentation.

Plum Street Advisors is an investment advisory firm that offers comprehensive financial planning and investment management services to help individuals achieve their long-term investment goals and objectives. Our offices are located in Louisiana and Massachusetts. We also conduct business in the states of California, Florida, and New York.