Financial Planning: Anti-Trump portfolio offered by robo advisor OpenInvest

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4 October 2018

Reflecting the polarized political climate of the country, one impact investing robo advisor says it has a new screen to satisfy client demand: Avoiding companies that financially support President Trump.

Celent’s head of wealth management research, Will Trout, had his doubts about the alpha-generating prospects of the investment theme. Advisors have long insisted that portfolios built on narrow factors like political beliefs will likely underperform portfolios that are broad based and low cost.

“All investments decisions are inherently political, in that the outcomes of the bets placed by the investor will be influenced by fiscal, monetary, social and other forms of policy,” Trout says. “Making investments decisions around very specific politics-based screens, on the other hand, seems to me akin to using a chainsaw to cut string. The mechanism is inexact if not overkill — what is the supposed correlation between this lens and portfolio performance? And given laws of unexpected consequences, it may as likely benefit as harm those companies that donate to Trump. Has anyone tried to quantify the potential benefits to the investor, either in terms of upside or downside? It’s just not possible.”

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Wealth Management
Media Type
News Articles
Geographic Focus
Asia-Pacific, EMEA, LATAM, North America