OpenInvest, a digital customizable asset management platform, has launched a new index based on racial justice issues, the San Francis-based company announced Monday.
The firm also recently announced it created Optimus, a new investment tool for financial advisors that creates values-based investment portfolios that drive client engagement and retention.
The racial justice index allows investors to invest in companies committed to racial justice, both in their workforce and among their key company stakeholders, the company said.
“In the U.S., race-based discrimination is illegal, yet progress toward achieving diversity and socio-economic equality is only incremental,” said OpenInvest, which is a digital investment advisory firm based on socially responsible investing that allows advisors to select a mix of social issues for their clients. “Some corporations have touted their commitments to diversity in their ranks, but results at the executive level are dismal.”
The racial justice index “leverages the power of financial assets to help drive social and economic growth for disenfranchised groups and encourage companies to strive for racial justice. It overweights companies that have set quantitative targets for racial diversity in their employee base and regularly publish diversity reports on their employee base.
It also divests investors from companies that have been named in recent diversity controversies and that disproportionately pollute in low-income or minority communities.
OpenInvest also has launched Optimus for advisors, which models tax-sensitive separately managed accounts tailored to clients' individual preferences. OpenInvest's proprietary algorithms automatically rebalance portfolios to keep them diversified, while tracking a market index or multi-index benchmarks, OpenInvest said.
“Through Optimus, advisers can seamlessly generate sample portfolios on their device and show the concrete impact these portfolios have on taxes, returns and the environmental and social causes their clients care about most,” OpenInvest said in a release.
"More and more investors are demanding impact investing options, yet financial advisors are not equipped with the technology required to serve this next generation of investors,” said Joshua Levin, co-founder and chief strategy officer with OpenInvest. “With Optimus, advisors can provide their own factor portfolios and custom solutions with ease."
OpenInvest said Optimus will help advisors tap into the impact investing market that, according to the Global Impact Investing Network, grew to $502 billion at the end of 2018 from $228 billion in 2017.