Even as impact investing percolates into the mainstream and some people—in this case, J.P. Morgan—predict big things for the sector, many questions remain about this emerging asset class regarding performance, asset allocation and access for retail investors.

It all made for a day of interesting conversation at Financial Advisor and Private Wealth magazine’s Impact Investing Conference on Sunday in Denver, which is part of the overall Innovative Alternative Investment Strategies Conference. A roster of some of the leading players in impact investing discussed where the industry was, is and likely will be, as financial advisors in attendance sought insights about how to incorporate this asset category into client portfolios.

In a nutshell, impact investing is about achieving both a competitive financial return and a measureable social, economic and/or environmental impact. Most impact investments are structured as debt funds. Some funds place more emphasis on creating an impact than on generating investment returns, and vice versa. So the relationship between the two can get a little squishy, and that can create confusion when it comes to gauging their financial performance.

“You have to be careful how you define rate of return,” said Liz Sessler, senior investment marketing manager at the Enterprise Community Loan Fund. “There’s a balancing act between creating opportunities in the communities we serve and trying to be excellent stewards of capital.”

Sessler manages the Enterprise Community Impact Note, which uses its funds to build affordable housing, community health centers, schools and other facilities in low-income neighborhoods. The minimum investment is $5,000, and interest rates paid on investments range from 1.5 percent for two years to 3.5 percent for 10 years.

“One of the hurdles impact investing needs to overcome is the perception of lower returns across the board,” said Justin Conway, director of investment partnerships at Calvert Foundation, whose Community Investment Note has 6,000 investors channeling capital to about 200 nonprofits and social enterprises around the globe.

The notes have an investment minimum of $1,000, and can be bought either directly or through a brokerage account. They offer fixed-interest returns ranging from 0.5 percent for one-year terms to 2 percent for five-year terms.

“Calvert has been called above average and below average [regarding its investment returns],” Conway said. “It depends on the year. We’re trying to produce stable returns.”

Gloria Nelund, chairman and CEO of the TriLinc Global Impact Fund, cited a study that showed nearly 50 percent of retail investors want to make an impact if they can, but not at the expense of giving up investment returns. “We need to continue creating products that can deliver returns,” she said.

The TriLinc Global Impact Fund, which launched earlier this year, is billed as the first registered impact investing-oriented fund in the U.S. open to non-accredited investors.

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