Investing in Socially Responsible Bond Funds: A Sustainable Approach

Investing with a conscience has gained significant traction in recent years. As investors seek to align their portfolios with their values, socially responsible investing (SRI) has emerged as a powerful trend. One avenue within SRI is socially responsible bond funds, which combine financial returns with positive impact. Let’s explore the role of these funds and highlight some top performers.

Understanding Socially Responsible Bond Funds

1. What Are They?
   • Socially responsible bond funds invest in fixed-income securities (bonds) issued by entities committed to environmental, social, and governance (ESG) principles.
   • These funds consider factors such as climate change, labor practices, diversity, and corporate governance when selecting bonds.
2. Why Invest?
   • Impact: By investing in socially responsible bonds, you support projects that promote sustainability, community development, and ethical practices.
   • Risk Mitigation: ESG analysis can identify risks that traditional financial metrics may overlook.
   • Alignment: Investors can align their portfolios with their values without sacrificing returns.

Top Socially Responsible Bond ETFs for 2022

1. VanEck Investment Grade Floating Rate ETF (FLTR)
   • Performance Over One Year: 0.5%
   • Expense Ratio: 0.14%
   • Annual Dividend Yield: 0.76%
   • Assets Under Management: $760.6 million
   • Holdings: Primarily floating rate notes (FRNs) from HSBC Holdings Plc¹.
2. SPDR Bloomberg Barclays Investment Grade Floating Rate ETF (FLRN)
   • Performance Over One Year: 0.4%
   • Expense Ratio: 0.15%
   • Annual Dividend Yield: 0.67%
   • Assets Under Management: $1.9 billion
   • Holdings: FRNs from Morgan Stanley and other investment-grade issuers.
3. iShares Floating Rate Bond ETF (FLOT)
   • Performance Over One Year: 0.3%
   • Expense Ratio: 0.15%
   • Annual Dividend Yield: 0.67%
   • Assets Under Management: $7.8 billion
   • Holdings: FRNs from Goldman Sachs Group Inc. and other high-quality issuers.

Sources:

1. Top Socially Responsible Bond ETFs for 2022 (Investopedia)
2. 7 Best Socially Responsible Funds (U.S. News)

Remember, investing in socially responsible bond funds not only generates returns but also contributes to positive change. Choose wisely, and let your investments reflect your values!