Selection Criteria Notes

Industrial Sustainability

Funds designated by Morningstar as having a “Sustainability Mandate” with an “ESG Focus” or “Environmental Focus” receive a “Yes” score on “Industrial Sustainability”. “Including Clean Energy” is noted for “Industrial Sustainability” funds which have investments in Energy or Utilities sectors per Morningstar Sector Weightings. Funds with holdings of palm oil producers are designated as a “Deforestation Risk”.

Broad Diversification

Passive management and factor investing — unlike sector funds or active management — typically leverage broad diversification to reduce risk and position your portfolio to capture the returns of broad economic forces. “Broadly diversified” funds hold thousands of stocks across the entire eligible universe of companies from different countries, continents, industries, size, value vs. growth — in both developed and emerging markets. Research shows that portfolios with concentrated holdings (tens or hundreds rather than thousands of stocks) have a higher probability of missing the best performing securities than broadly diversified portfolios. Diversification does not eliminate the risk of market loss.

Digital Platform

Digital platforms typically use state-of-the-art web technology to automate service delivery for your convenience, lower cost, and faster response. Digital advice platforms may offer additional features for improved learning and understanding of core investment concepts and trade-offs for better decision making.

Digital Advisor

A digital (or robo) advisor is an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners. Robo advisors are typically low-cost, have low account minimums, and attract younger investors who are more comfortable doing things online. Even financial giants like Charles Schwab and Vanguard now offer robo-advising, managing over $30B of assets on automated (digital) platforms. Recent advances in sustainability metrics and portfolio construction have facilitated the emergence of “fossil free” robo-advisors.