- Hey there. I'm Christian
Ryther of Curreen Capital.
A lot of the time,
I'm out and I'm talking to somebody cool
and they inevitably say,
oh, you're an investor.
You must be into socially
responsible investing.
And I say, no.
Actually, I don't like
socially responsible investing,
as, you know, capital letter SRI.
I don't like ESG, the
Environmental, Social,
and Governance focus investing.
And, it's not because
these are bad things,
it's not because I'm out there, you know,
clubbing seals after work,
like, that's not what I'm into.
The reason is, I think
that people all too often
wrap themselves in these
flags of ethical/moral,
and they use it to charge
excessive fees for mediocre products,
and worse than that, the people who get,
you know, caught in these sort of traps,
these sort of mediocre investments,
are the good people, are
the people with good hearts,
good intentions, who want to
make the world a better place.
And it makes me mad, it riles me up,
that you're, you're
trapping the best people.
Mmm. Anyways.
So, what's my beef with SRI?
So, first off, what does it mean
to invest socially responsibly?
I know what it means.
You know what it means.
The labor unions know what it means.
The religious groups know what it means.
The environmental groups
know what it means.
But, they're all different.
We all have these different takes on it.
And, if you're into digital privacy,
you've got a completely
different take on it,
and you won't touch any of the stuff
that the socially, the
normal SRI funds are into.
So, it's like yes, there are
things that I will not touch,
there are things that I think are wrong
and should be removed from this earth,
but what I think doesn't line
up exactly with what you think
and it becomes very difficult when we try
to make an investment vehicle that follows
the right path when it's
so difficult to know,
what is the right path?
So, that's the first problem.
Second problem are the fees.
Because you've got a Vanguard fund
that tracks a socially responsible index.
You've got a BlackRock ETF
that tracks a socially responsible index.
But, my guess is, if you're pitched
one of these socially responsible funds,
you were not pitched the Vanguard
fund or the BlackRock ETF.
You were pitched a fund with fees
maybe one or one and a half
percent above those every year.
And, I'm not opposed to high fees,
(I actually have a fund with high fees)
I'm opposed to high fees when
you don't get value in return.
So, high fees should
only be accompanied by
returns that exceed those of the index,
otherwise why the heck
are you with those things?
And so the Vanguard fund
seems to lag the S&P by a little bit.
The BlackRock ETF actually
seems to be pretty darn close,
but they're not beating the index
by on return basis,
so the value of our investment
into socially responsible has
to be made up somewhere else,
so it's in the fact that we
are effecting positive change
or maybe with the Hippocratic Oath,
at least not doing evil.
Like, we're not making
the world a worse place
through our investment.
My issue with these high fee funds
is that, like, okay, I'm
getting worse returns
and where does my invested money,
where does my investment
into making the world a better place go?
And I worry that some of
it goes into a townhouse
in San Francisco, or to
pay for somebody's boat,
or, you know, private jets to fly around
and give seminars about
how good you can be
if you invest in these things.
And that just doesn't strike me
as the best way to put money towards
making the world a better place.
So, that goes sort of into my third idea
which is that I don't
want to combine investing
with making the word a
better place with my money.
I think when you put
those two things together
you get this sort of unpleasant compromise
that doesn't do either job
as effectively as it could.
So, I think if you want to
make the world a better place
you go into investing, you do that purely,
you don't buy stuff that
makes you feel, you know, ill.
But, you do a good job investing.
And then you take the
profits of that investing
and you make the world a better place
with targeted investments.
So, what do you do with
this investment framework
if you want to do good?
A, if it's you, investing
in stocks yourself,
don't buy stuff that makes you feel sick.
Don't be a part of something
that you think is evil.
B) if you have an investment manager,
not only should they be
someone you can trust
to work on your behalf,
and someone who knows what they're doing,
and actually can beat the
market after their fees,
but you also want to know that they have
some sort of moral compass that
you can feel good that, you know,
they're out there investing your money,
not in stuff that will make you ill
if you find out about it.
C) but, for 95% of us, what should we do?
Well, not me, because
I'm in camp number one,
but, so 95% of the people,
what should they do,
if they're in an index fund?
Like I said, take that money that you save
by being in a low cost index fund
and not, you know, subsidizing
somebody's lifestyle,
even if they're also progressive,
you don't have to
subsidize their lifestyle,
take that money that you saved
and put it to good use.
Like, calculate, okay, one
percent of my money every year
is being saved because
I'm in this low cost fund.
I'm going to take one percent of my money
and I'm going to donate it to X charity,
or X number of charities.
Or, I'm going to install stuff
that makes my life better
like LED light bulbs
everywhere in my house.
Something that makes the world
a little bit of a better place.
Do that.
That's pure, that's clean.
Then you have solid returns
and you're making a positive influence,
a positive impact in the world.
You're effecting positive change.
You're doing well.
You don't have to do that
by buying this mediocre
compromise of investment
plus doing good.
Like, you can vote with your
dollars elsewhere directly.
You don't have to do it as
part of your investment scheme.
So, those are my thoughts
on SRI investing.
Why it makes me a little bit mad.
Please leave a like
and please leave some comments below.
I read all of them and I do
want to know what you think.
Thank you so much.
Also, after all this talk,
I have to go donate some money to charity
because I'm not a hypocrite.
