Millennials increasingly opting for impact investing

According to an expert at US Trust, increasing numbers of Millennials are turning to impact investments as they seek to make more out of their investments than a mere return.

Jackie VanderBrug, the senior vice president at US Trust, said that many investors these days were no longer content with solely making a return on their investment, but instead sought an environmental or social impact as well.

Ms Vanderbrug said: "For Millennials, impact investing is really a part of their identity. Millennials are conscious consumers, so it is logical that they are also conscious investors."

US Trust's recently released annual Wealth & Worth survey questioned 684 high net worth individuals with $3 million plus in investable assets to hand. The report found that the vast majority (72 per cent) of respondents said that they had far greater confidence in the ability of the private sector to seek and find a resolution to social and environmental issues than in the government's ability to do so.

The report also found that more than half (60 per cent) of respondents also said that they believed private money that was injected into public works and social programmes often led to better results than public money.

Ms Vanderbrug told <a href="
” target=”_blank”>The Street: "On our platform, we see the returns of our impact investing managers exceeding those of 60 per cent of their peers. It is a misnomer that this is a concessionary investing philosophy."

The organisation also found that impact investing is currently riding high — the use of such investments enjoyed double digit growth among high net worth millennials and women over the last year, with those in the ultra-high net worth bracket seeing the biggest increase over the course of a year. Indeed, 27 per cent of people within this bracket now make use of social and environmental impact when making their investing strategies, a marked rise from just nine per cent last year.

Overall, 28 per cent of Millennials questioned for the report were found to be making use of impact investments — a rise from just 17 per cent recorded a year ago. A further 57 per cent said that they were interested in exploring the impact investment opportunities — a rise from the 43 per cent that said they were interested in doing so a year ago.

The vast majority (85 per cent) of Millennials reported that they saw their current and future investment decisions as being a manner in which they were able to show their social, political and environmental values. Around 93 per cent of those surveyed reported that the impact a company made in these arenas was a key consideration to take into account when investment decisions were being made.

The report found that almost 75 per cent of those in the high-net-worth bracket were contributing financially on some level to nonprofit organisations and causes, and many of them said that it was this contribution that they saw as being the most valuable out of all their investments. A further 61 per cent of these individuals said that they gave their skills, services and time to such organisations, while 16 per cent reported that they worked for a nonprofit organisation.

A vast 87 per cent reported that they saw businesses and individuals as being the most effective when it came to developing improved economic opportunities, as well as an improved standard of living for people. Meanwhile, just 10 per cent of those surveyed for the report said that they saw the government as being the most effective when it came to creating economic opportunities.

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