ESG Value Large/Mid Cap US Stocks

Smart Beta Portfolios (ESG variants)

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0.20% annual

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US equities

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$100

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ESG Broad Market launched May 2019; the other four launched July 2019.

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Not available

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The ESG Value portfolio offers investors a systematic way to pursue responsible investing alongside a value-oriented strategy. It targets large- and mid-cap U.S. companies that demonstrate strong Environmental, Social, and Governance (ESG) practices while also appearing attractively priced relative to their fundamentals. By focusing on businesses that uphold high sustainability standards while trading at attractive valuations, the portfolio seeks to align financial objectives with personal values. The result is a broadly diversified set of holdings that blends ESG screening with the discipline of value-focused stock selection.

Interactive Advisors is an established name in the field of online investing, with a history of path-breaking work. The platform offers a variety of portfolios, including the Socially Responsible Investing (SRI) portfolios, which are managed by Interactive Advisors's Chief Investment Officer and Investment Management team. The “Socially Responsible Investing” approach to portfolio construction is designed to invest in companies that operate businesses keeping in mind not only financial goals and profits, but also ethical and environmental concerns. The incorporation of Environmental, Social and Governance (ESG) factors into investment decision-making is aimed at incentivizing better practices from the companies. The sustainability practices foster long-term value creation while giving investors an opportunity to align their investments with personal values.

Capital growth with a similar risk profile to broad equity markets. Investing in equities and prepared to accept fluctuation in portfolio value.

Values-conscious investors: If aligning your portfolio with strong Environmental, Social, and Governance (ESG) standards matters to you, this portfolio offers a structured way to invest in companies that rank highly on responsibility metrics within their industries. Contrarian value seekers: This portfolio suits investors who believe in buying companies when they appear undervalued relative to fundamentals. Its systematic approach targets stocks with attractive price-to-earnings ratios. Value strategies can experience periods of significant underperformance, particularly during growth-led market cycles. Investors should be comfortable with the possibility of extended underperformance relative to the broader market. Diversified equity investors: With holdings spanning large- and mid-cap U.S. stocks and built-in sector guardrails, this portfolio appeals to investors who want wide market exposure managed through a structured, repeatable process.

Research: The investment team draws on detailed third-party ESG data to screen and construct the portfolio. This data evaluates company disclosures from annual reports, regulatory filings, and corporate websites. Approach: The portfolio follows a systematic, rules-based process to determine which stocks to include and how to weight them. The investable universe consists of the largest U.S.-listed companies that maintain strong ESG profiles relative to their industry peers, drawing on third-party ESG ratings as part of the screening process. Stocks exhibiting compelling value characteristics receive greater consideration for inclusion, and the portfolio rebalances quarterly to keep holdings aligned with its methodology. Allocation discipline: The portfolio targets U.S. large- and mid-cap companies with above-average ESG scores within their respective industries. Stocks with more attractive valuation ratios, including both trailing and forward price-to-earnings measures, receive larger allocations. This contrarian approach directs capital toward companies that may currently be out of favor yet appear positioned for recovery. As an added layer of risk control, the construction process penalizes highly volatile stocks and limits concentration in any single market sector. Sell discipline: Sell decisions follow the quarterly rebalance schedule. When a stock no longer meets the portfolio's ESG or valuation criteria, it is replaced by a company that demonstrates more attractive combinations of ESG performance and value characteristics at that time. Exceptions: Positions in stocks affected by corporate actions, such as mergers or restructurings, may be sold or adjusted outside the normal rebalance cycle.

Values-aligned stock selection: Every holding is screened for strong Environmental, Social, and Governance (ESG) credentials within its industry, so your investments reflect responsible business practices alongside a disciplined value strategy. Systematic value selection: A quantitative framework selects and weights holdings based on valuation metrics, removing emotional bias and maintaining consistent exposure to value characteristics through quarterly rebalancing. Built-in risk controls: The portfolio reduces exposure to volatile names and avoids heavy concentration in any single sector, helping spread risk across a broad base of large- and mid-cap U.S. companies.