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Tag: Mutual Funds
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What’s behind the retreat in responsible investing? – MoneySense
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The decline in RI usage was driven by fewer new advisors offering RI to clients, the 2025 Advisor RI Insights Study said. The proportion of clients using a responsible methodology was roughly steady at 18%, however, compared to 19% recorded two years ago. Increasingly, it is clients initiating conversations about responsible strategies (41%) over advisors (28%). Still, nearly half of advisors (46%) agree that questions about RI should be included in Know Your Client forms used with new clients.
“While adoption has steadied, investor demand for RI remains strong and advisors remain open to closing the service gap,” Patricia Fletcher, CEO of the RIA, said in a release. “Mobilizing wholesalers and equipping advisors with tools and training, we can empower advisors to align portfolios with their clients’ values.”
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The reasons for the RI pullback could be related to economic headwinds, the backlash against environmental, social, and governance (ESG) criteria in the U.S., or the maturation of the RI niche, with fewer new investment products coming on the market, the study’s authors speculated.
This reversal is consistent with public attitudes reflected in President Donald Trump’s recent dismissal of climate change as a “con job” and Canada’s withdrawal of carbon taxes and electric vehicle subsidies.
But it may also be rooted in the relatively poor performance of RI investments in recent years.
In the early years of what was then called “ethical investing”—in the 1990s and early 2000s—many RI funds could boast superior returns to broad index funds. RI advocates pointed to the way ESG criteria served as a force for risk mitigation, steering clients away from potentially unsustainable industries (tobacco, coal) and companies at greater risk of lawsuits and increased regulation.
The last decade, by contrast, has been marked by strong performance of major indices like the S&P 500 and underperformance by sectors commonly overweighted in RI portfolios, such as renewable energy. In the RIA survey, “Concerns about returns” ranked as the second most common reason advisors cited for not including RI in client portfolios (47%), after “Lack of client interest/demand” (61%).
Other factors possibly contributing to the RI pause include the rising market share of exchange-traded funds (ETFs) over mutual funds—76% of advisors offering RI said they predominantly use mutual funds, compared to just 8% using ETFs—and skepticism fed by so-called “greenwashing.” Thirty-five percent of advisors polled by RIA cited “Concerns about the validity of ESG benefits” among their reasons for not offering RI portfolios.
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Jessica Barrett
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5 Smart Money Moves to Make With Your RMDs
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Once you begin taking required minimum distributions (RMDs) at age 73, you must withdraw a set amount each year from your pre-tax retirement accounts. If you don’t need that money for living expenses, you can still use it productively. Many retirees choose to reinvest their RMDs in a taxable brokerage account, add to emergency savings, buy income-producing investments, pay down debt, or use part of the funds for qualified charitable distributions to reduce taxable income. A financial advisor can help you decide which option supports your overall retirement plan.
Once you take your RMD, the money becomes taxable income, but you can still put it to work. After paying the taxes owed, you can reinvest the remaining funds in a regular investment account. Common options include mutual funds, exchange-traded funds (ETFs), dividend-paying stocks, or high-yield savings products. The goal of this strategy is to keep your money growing, even though it has left your retirement account.
Before reinvesting, think about how soon you may need the money. If you expect to use it within a few years, you may want safer choices such as certificates of deposit (CDs), money market funds, or short-term Treasury bonds. If you can leave the funds invested for longer, a mix of stock and bond funds can offer both income and growth potential. It’s also important to review how new investments could affect your taxes, since earnings in a taxable account may be reported each year.
Reinvesting your RMD can make sense for retirees who already have steady income from Social Security, pensions, or annuities and who do not rely on RMDs to pay regular expenses. It can also work for retirees who want to grow their portfolios for future healthcare costs or leave more assets to heirs. Keeping this money invested can help preserve your purchasing power over time.
After paying the taxes owed on your RMD, you can move the remaining funds from your traditional IRA, SEP IRA, SIMPLE IRA, 401(k), or 403(b) into a regular investment account. This keeps your withdrawn money invested and gives it the potential to continue growing even after it leaves a tax-deferred account.
You can also transfer assets in kind from your retirement plan to a taxable account instead of selling them. This means you move the same investments, such as mutual funds, ETFs, or individual stocks, and the value of that transfer counts toward your RMD. The IRS only requires that you take the withdrawal and pay the tax on it. You are not required to sell or spend the money.
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