One might expect that a socially responsible portfolio could lead to lower returns in the long term compared to another, similar portfolio. The notion behind this reasoning is that somehow there is a premium to be paid for investing based on your social ideals and values.
When considering the possible performance of Betterment’s SRI portfolio, Betterment examined evidence based on both historical and forward-looking performance analyses. Although past performance does not guarantee future results, the data indicates that the performance of Betterment’s SRI portfolio versus our Core portfolio is not significantly different, although there may be return differences over shorter time periods. For a more detailed discussion on the SRI portfolios’ performance, please refer to our Socially Responsible Investing White Paper and Disclosures.