The rise of value-based investing

At a time when consumers are increasingly voting with their wallets, a new trend is emerging in the financial sector: values-based investing. This investment strategy allows investors to align their portfolios with their personal beliefs and social concerns. But what exactly is values-based investing and how can it benefit both investors and society?

What is value-based investing?

Values-based investing, also known as socially responsible or ethical investing, is an investment strategy that takes into account both financial returns and social and environmental responsibility. Investors can invest their money in companies and funds that correspond to their personal values - be it in terms of environmental sustainability, social justice or corporate governance.   

The growing importance of values in investment decisions

Recent studies show a clear shift in investors' priorities. A 2021 survey by Morgan Stanley found that 79% of private investors are interested in sustainable investing, up from 71% in 2015. This trend is particularly pronounced among younger generations, with 99% of millennials showing an interest in sustainable investing.   

This development reflects a general social trend towards conscious consumption. Just as people are paying more attention to the products and companies they support, they are also paying more attention to where their investment money goes.

The potential benefits of value-based investing

1. alignment with personal convictions: The most obvious advantage is that you can invest with a clear conscience, as the investments correspond to your own values.

2. competitive returns: Contrary to the common misconception that values-based investing means lower returns, many socially responsible funds have shown comparable performance to conventional investments.

3. risk management: companies with strong environmental, social and governance (ESG) practices often have better risk management strategies, which can lead to more stable long-term results.

4. positive impact: By channeling capital into companies with positive practices, investors can encourage behavior that benefits society and the environment.  

Challenges and Considerations

Despite the many advantages, there are also challenges. One of the biggest difficulties is defining what a "good" or "ethical" company is. Standards can vary widely, and what is ethical for one person may not match the values of another.

There is also a risk of "greenwashing", where companies or funds exaggerate their sustainable or ethical credentials. This underlines the importance of thorough research and due diligence in value-based investing.

The role of technology in value-based investing

Fortunately, technology is making it easier for investors to align their portfolios with their values. Platforms like Moniflo use data and analytics to provide detailed insights into companies' ESG practices, allowing investors to make more informed decisions.

These platforms often offer functions such as:   

• Customize filter options based on values

• Detailed impact reports

• Comprehensible impact assessments   

Thanks to these technologies, values-based investing is made accessible to a wider range of investors. For example, Moniflo's values-based investment platform allows investors to choose from over 16 goals of the UN Sustainable Development Agenda and apply up to 19 exclusion lists to ensure that their investments are in line with their personal values.

Simplify value-based investing with Moniflo

Although value-based investing offers exciting opportunities, it can seem overwhelming for beginners. This is where Moniflo comes in to make value-based investing accessible and simple for all investors. Advances in data analytics and artificial intelligence are making it increasingly easy to incorporate value-based factors into the investment decision-making process. At Moniflo, we use these technologies to provide detailed value-based insights to enable informed decisions.

How Moniflo supports value-based investors

1. comprehensive value-based screening: Moniflo offers a carefully selected range of value-based screened funds, saving you research time and ensuring that your investments are in line with your principles.

2. detailed value assessments: Each investment option on Moniflo is provided with detailed value assessments so you can easily understand the impact of a company.

3. customizable priorities: As values are often very individual, Moniflo allows you to customize your portfolio according to your personal priorities.

4. transparent reporting: Moniflo provides regular updates on both the financial performance and the value-based impact of your investments, so you always know exactly how your portfolio is supporting positive change.

5. educational resources: Moniflo provides a wide range of educational content - from beginner's guides to detailed analysis of value-based trends.

6. user-friendly interface: Moniflo's intuitive platform makes it easy to create, monitor and customize your value-based portfolio - whether you're a seasoned investor or a novice.

Start value-based investing with Moniflo  

Are you ready to align your investments with your values? Then you can start with value-based investing on Moniflo:

1. download the Moniflo app and create an account - it's quick and easy.

2. discover the variety of investment opportunities based on your values and preferences.

3. use Moniflo's impact assessment system to build a diversified value-based portfolio that aligns with your financial goals and principles.

4. monitor the performance and impact of your portfolio with Moniflo's user-friendly and transparent app.   

The future of investing

With the shift towards a more conscious and responsible society, values-based investing is likely to become increasingly important. It represents a new way of thinking about the role of finance in society - not just as a means of generating returns, but also as a tool for positive change.   

While it's important to remember that every investment carries risk and past performance does not guarantee future results, values-based investing offers an exciting way to build wealth while advocating for important causes.

If you are rethinking your own investment strategy, it might be worth considering how values-based investing could be aligned with your financial goals and personal principles. After all, when it comes to investing, "The best time to plant a tree was 20 years ago. The second best time is now."