The Importance of Values Based Investing

It’s easy to assume that investments quietly sit in the background of our financial lives, but every dollar invested plays a role in shaping the world around us. Values-based investing asks a simple but powerful question…Do your investments reflect what you actually care about?

Michael Wheelwright, Managing Director and Co-Founder of Holistic Finance, works with clients to help align their money with their personal values. While this idea may sound intuitive, deep values alignment is still relatively rare in the financial services industry. Most investors are offered a narrow set of choices without clear insight into how those investments impact issues they may care deeply about.  ¹

The Hidden Impact of Traditional Investing

When many people enroll in a workplace retirement plan, such as a 401(k), they are simply told to choose from a list of mutual funds or ETFs. Rarely are they informed that investing often means becoming a partial owner of thousands of companies, some of which may be involved in industries like weapons manufacturing, fossil fuels, predatory lending, deforestation, pollution, or harmful public health practices.

We believe if investors were presented with this information upfront, many would pause and ask whether alternatives exist that better align with their ethical standards. The answer is yes. Values-aligned options do exist, but they require deeper analysis and more intentional decision-making.

Using Data to Understand Values Alignment

One of the tools Holistic Finance uses is a platform called YourStake, which allows advisors to analyze mutual funds and ETFs through a values-based lens. This type of analysis goes beyond surface-level labels and examines the real-world impacts of underlying holdings. ²

Mutual funds and ETFs are widely used, with an estimated $35 trillion invested in them. Their popularity means that many investors are exposed to nearly every sector of the stock market, often without fully understanding the implications.

Tools like YourStake help bring transparency to these investments and highlight how portfolios align, or conflict, with an investor’s priorities. ^{3 Google Search: "What is the total value of all of the mutual funds and etf's that US consumers have?"}

Comparing Traditional and Values-Screened Portfolios

Even funds marketed as environmentally or socially conscious, such as ESG-focused ETFs that track indices like the S&P 500, may still include companies that conflict with certain values. While these funds attempt to improve alignment, deeper screening can significantly reduce exposure to harmful practices.

Values-screened portfolios can show measurable reductions in areas such as health and safety violations, air and water pollution, and environmental damage. They may eliminate exposure to industries like fast food, certain agricultural chemicals, gambling, alcohol, predatory lending, private prisons, and exploitative labor practices.

At the same time, they can increase exposure to clean energy companies, affordable housing initiatives, climate-supportive businesses, and organizations with more equitable executive compensation.

This level of customization allows investors to make more informed choices about where their money is going and what kind of impact it supports.

Why Values-Based Investing Matters

Values-based investing is not about perfection or exclusion at all costs. It is about awareness, intention, and alignment. By understanding how investments affect communities, the environment, and global systems, investors can make choices that better reflect their beliefs while still participating in the financial markets.

Working with an advisor who prioritizes values alignment can help investors navigate complex data, evaluate tradeoffs, and design portfolios that connect financial goals with personal meaning.

A Forward-Looking Approach to Financial Planning

We think values-aligned investing represents an evolving frontier in financial planning. It challenges traditional assumptions and encourages investors to think more deeply about the role their money plays in the world.

Aligning money with meaning is possible with the right tools, thoughtful analysis, and informed guidance. While this overview is educational and not personalized investment advice, it highlights how investors can move beyond default options and toward more intentional financial decisions.

Disclosures

Holistic Finance is a Registered Investment Adviser with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.

This video is for informational and educational purposes only and does not constitute investment, tax, or legal advice.

References to specific financial institutions are for example purposes only and do not constitute endorsements or recommendations.

Sources

1 www.holisticfinance.com
2 www.yourstake.org
3 Google Search: “What is the total value of all of the mutual funds and etf’s that US consumers have?”

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