Swell Investing is a Robo-Advisor that offers socially and environmentally responsible investing options. The firm is backed by Pacific Life a company with over 150 years of experience in financial services. The company’s approach to investing focuses on Socially Responsible Investing (SRI). Investors can pick from seven investment themes that are based on important social and environmental trends.
Minimum Investment : $50
Account Management Fees: 0.75% annual fee
Account Types: Flexible Brokerage Account, Traditional IRA, Roth IRA, and SEP IRA
Customer Support: Swell Investing offers phone and email support.
SIPC Insured: Yes, SIPC protects securities customers of its members up to $500,000 (including $250,000 for claims for cash).
How Swell Investing Works
Swell is your investment advisor, your cash and securities are held in an account at Folio Investments Inc, an SEC registered broker-dealer and member FINRA/SIPC. The firm offers portfolio options that are managed by its portfolio managers. Swell Investing focuses on socially responsible investing (SRI). To get started investing you need to have $50 in your account. You can connect your bank account with Swell. Swell charges an annual management fee of 0.75%. If you were to invest $1000, Swell would cost you $7.50 per year. The Platform has no trading fees or expense ratios.
Swell’s Investing Portfolio Options
The portfolios that Swell offers are made up of individual stocks. The companies that Swell includes in its portfolio must have revenues that align with at least 1 of the 17 United Nations Sustainable Development Goals. Some of the goals included are No Poverty, Clean Water and Sanitation, Climate Action, and Affordable and Clean Energy. Swell has seven investment portfolios themes to choose from.
- Impact 400 – is a broad SRI portfolio of about 400 companies that Swell thinks are most impactful.
- Zero Waste – a portfolio of 36 companies that are focused on solutions for recycling, compost, waste minimization and new materials for everyday products. This fund includes companies that are recycling plants, repurposing companies and waste treatment facilities.
- Clean Water – a portfolio of 49 companies that includes companies that provide water filters, water pipe repairs and water treatment facilities. The portfolio puts you money to work into companies conserving water, cleaning it up, and streamlining our systems.
- Green Tech – a portfolio of 59 companies that are focused on energy efficiency, building desirable products, and making a concerted effort to reduce our pull on the energy infrastructure. The portfolio includes companies provide electric vehicles, lithium mining, energy efficiency solutions.
- Renewable Energy – a portfolio of 56 that are harnessing natural resources to power our world. The fund includes companies that make solar panels, wind turbines, Lithium batteries.
- Disease Eradication – a portfolio of 57 companies that are investing in pharmaceutical and biotech companies conducting R&D and developing novel approaches to improving today’s biggest health challenges. The fund includes biotechnology, medical research companies, and medical device manufacturers.
- Healthy Living – a portfolio of 53 companies that are focused on food, fitness, and new technologies that enable more of us to live longer, healthier lives. The portfolio includes fitness companies, innovating home care providers, and organic food distributors.
Swell offers three options for your investment allocation. The first option is Thematic Portfolios which allows you to pick any combination of the portfolio themes. Swell’s Impact 400 Balanced Portfolio is the second option, which offers a balanced portfolio that gives you exposure to about 400 companies that make the biggest impact for socially responsible investors. The third option allows you to create a combination of Swell’s Impact 400 and the thematic portfolios.
Swell uses tax-intelligent lot ordering to reduce your taxable gains. Tax lot ordering will sell the shares with the largest losses first and largest gains last. You can make automatic deposits on a weekly or monthly basis. Your portfolio will be rebalanced semi-annually for you unless there is an event deemed by Swell that compromises the integrity of the respective portfolio’s underlying social cause. Some of the companies in Swell Investing’s portfolios issue a dividend. Swell has a dividend reinvestment program that will reinvest any dividends that are over a $1 back into your portfolio mix. You are allowed to tailor your portfolio by removing up to three individual stocks that do not align with your investment values or goals. Swell keeps around 0.25% of your portfolio in cash to avoid having to sell securities to pay the annual management fee.
Pros and Cons
Pros
- Low account minimum of $50
- Good for Socially Responsible investors
- Swell has a dividend reinvestment program
Cons
- Lack of investing options compared to other robo-advisors.
- The Annual Management fee of 0.75% is high compared to other robo advisors fees of 0.25%-0.50%.
- Swell does not have mobile apps