Impact investors upping allocations

Calvert survey finds 94% of advisers want more impact products

More than 60% of investors who use impact funds are planning to increase their allocations to those products over the next year, and financial advisers are showing similar enthusiasm.

That’s according to results of a survey published last week by Calvert Impact Capital, which queried about 800 people who hold the company’s Community Investment Note, as well as advisers with whom the company has a relationship.

Nearly all — 94% — of advisers who responded said they would like to see more impact products on the market, according to Calvert. Eighty-eight percent said they plan to increase the amount of impact investments used in clients’ portfolios, the survey found.

“When asked about barriers, ease of purchase was highlighted as the top challenge, a sentiment echoed by non-adviser respondents,” Calvert Impact Capital officer of investor relations Josh Bay wrote in a summary of the findings.

“As the industry continues to grow and more accessible products are created, our survey data suggests ever increasing demand for impact investing and momentum towards acting upon that demand.”

When asked what their reasons for impact investing were, the top response was environmental sustainability, cited by 57% of investors, followed by racial justice and equity (41%), renewable energy (33%) and gender equity (25%).

Millennials and Gen Xers were the most likely to say they planned to increase their allocations to impact investments over the next year, at nearly 75% for each generation. About half of Baby Boomers, members of the Silent Generation and Gen Zers said the same.

Calvert described the Community Investment Note as a gateway to impact investing, as investments in the fixed-income security can be made for as little as $20. The note, which launched in 1995, has a total balance of more than $588m and currently has return rates ranging from 0.5% to 3% across maturities from one year to 10 years, according to the firm.