Enabling financial health

Impact investing

Impact investing is investing for the potential to make a financial return as well as generate a measurable, beneficial social or environmental impact. Today, more and more people from all walks of life want to learn about how their money can be used to create social and environmental impact.

Bank of America Corporation is committed to meeting client demand and working to build a commercially viable market for impact investing while enabling financial health. We know that structuring portfolios to help foster good corporate practices has enormous potential to change investments, lives and communities.

For several years, our Merrill Lynch and Bank of America Private Bank advisors have been deepening relationships with clients by talking with them about their goals. During these discussions, clients are increasingly articulating impact-oriented goals alongside their overall financial priorities and our advisors can offer a broad range of impact investing opportunities, including custom portfolios, mutual funds, exchange-traded funds and Separately Managed Accounts to help these clients pursue their goals.

Today, 33 percent of Merrill Lynch advisors use five or more sustainable and impact investing solutions to help meet their clients’ needs – 40 percent more advisors as compared to just three years ago. In response to these trends and growing client demand, we are enhancing process, platform, investment guidance and resources dedicated to impact investing.

Our new and expanded capabilities will enable us to further incorporate clients’ impact investing preferences into wealth planning tools and portfolio construction, including:

  • Deeper client discovery conversations – Merrill Lynch will introduce additional ways to help clients articulate their impact investing preferences and further inform goals-based discussions with their advisors.
  • Integration with wealth planning tools – Merrill Lynch will also enhance one of its primary wealth planning tools – Wealth Outlook – to further support goals-based conversations with clients on the topic of impact investing.
  • The Chief Investment Office offers six investment sleeves within its overall Socially Innovative Investing Portfolio (S2I). They include a Socially Innovative Investing Strategy (Large Cap); Women and Girls Equality Strategy (WGES); Environmental Sustainability and Stewardship Account (E2S); Religious Voice and Values (R2V); Human Rights and Recognition (H2R); and S2 all cap. Additionally, investors can have custom portfolios created specifically for them.
  • Bank of America Corporation officially launched an impact investing program in 2013 to meet rapidly growing client demand for investments that have a positive impact on society or the environment without sacrificing performance. As of December 31, 2018, clients of Bank of America Corporation’s wealth management businesses had more than $17 billion in client balances with a clearly defined ESG approach.

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.

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