Constructing Meaningful and Impactful Investment Portfolios Panel

Date: Oct 20 2020

Mindy Kalinowski Earley, CMP, CFBA, Chief Learning Officer

Here Michael Hotz (Vice President at Asset Consulting Group) and Katherine Kroll (Senior Institutional Sustainable Investing Specialist at Brown Advisory) share current thinking and approaches to impact investing.

In the last 5-7 years, families have shown a strong interest in these areas:

  • Technology and Artificial Intelligence
  • Cannabis
  • Cryptocurrency
  • ESG Investing

As a rising generation family member trying to communicate your interests to different generations, it’s helpful to understand what different generations think about various asset classes over the years. Let’s look at 1990 compared to 2020.

1990 did not offer a lot of sophisticated technology advancements. But today the largest companies are all tech based – Apple, Amazon, Microsoft, Google, Facebook. What are some ways to invest in tech and AI? Liquid investments such as ETF’s, mutual funds and individual companies, or illiquid investments like venture funds, where you invest in the early stages of companies that apply AI to massive industries.

The common perception of cannabis has changed from 1990 to 2020. Cannabis is now legal for recreational use in 11 states and for medical use in 22 states. Similar to technology, there are different ways to invest in cannabis – liquid or illiquid through private equity and venture funds.

The currency of 2020 involves different digital and crypto currencies. And like tech and cannabis, there are different ways to invest in cryptocurrency. Again, liquid investments through ETF’s and mutual funds, and through individual tokens, like Bitcoin. And then also semi-liquid and illiquid investments, through hedge funds or venture funds.

Back in the 1990s, ESG investing was mostly focused on negative screening, e.g. building a portfolio with no “bad” or controversial companies. Today’s ESG investing is about supporting companies that are doing good, focusing on gender equality and diversity, or developing tech for sustainability in the community.

ESG investing is the consideration of environmental, social and governance factors, alongside financial factors, in the investment decision-making process. ESG investment options are available across asset classes, including equity, fixed income and real assets.

How does a rising gen member introduce an esoteric investment idea to the broader family? First, Hotz says, do your homework. Understand the types of investment structures that are available, the size of the opportunity, the reasons it’s attractive, and look at volatility.

The point being, there are a lot of different ways to construct a portfolio that’s reflective of impact investing. Kroll speaks primarily to driving performance, but others may think more about values. There is no right or wrong answer. You can have both performance and impact. You just have to be super intentional.

Mindy Earley is an education and family office professional who believes that empowerment and knowledge are key to living a purpose-driven and self-actualized life. She is inspired by helping people learn, grow and discover the way that they will make personal and productive contributions, using their strengths and talents.

Areas of Expertise: Family Learning

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