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Motif Investing, Pacific Life Partner on ‘Cause’ Motifs for Millennials

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Online broker Motif Investing said Monday that it has partnered with Pacific Life to offer new cause-driven motifs for millennials through its newly launched subsidiary, Swell Investing.

The four motifs “track the S&P with a bit of a twist: they focus on companies that contribute to a cause,” Hardeep Walia, founder and CEO of Motif Investing, told ThinkAdvisor

Walia says that Motif is also developing “solution set” motifs for investment advisors, including smart beta motifs, which should be announced in a matter of weeks.

Swell Investing uses Motif Investing’s thematic investing platform to allow millennials to easily invest in the causes and issues they care about while growing their portfolios. Motif Investing provides the technology and distribution for the Swell offering while Pacific Life and Swell “manage” the motifs, Walia says.

Swell will donate 20% of its revenue to organizations within the motifs devoted to improving education, fighting cancer, upholding human rights and ending poverty.

Motif Investing pays Swell a royalty of at least $1 out of the $9.95 total commission per investment or rebalance of the Swell motifs. From that revenue Swell gives 20 cents out of every $1 to the causes the Swell motifs support.

Investors can choose from four different motifs — groups of stocks of companies publicly traded in the U.S. whose foundations are the biggest contributors to each of the causes.

While any age group can invest in the motifs, Walia notes that the Swell motifs are perfect for millennials because such investors are typically “price sensitive, care about transparency and cost” as well as what they are investing in. “There’s a huge push, especially within [the millennial] generation, towards socially responsible investing.”

While typical “green or SRI-type mutual funds charge you lots of ongoing fees, you have no transparency, and it doesn’t work in terms of return,” with the motifs, “you have something that’s transparent, low cost and if you don’t like what’s in it you can change it.”

The four motifs are:

Improve Education: Showcases companies like General Electric, Wal-Mart Stores and General Motors that support education-related charities.

Fight Cancer: Includes companies committed to supporting cancer-related charities. Top stocks include Bristol-Myers Squibb, 3M and Verizon Communications.

Uphold Human Rights: Showcases companies like Anheuser-Busch, Johnson & Johnson and Exxon Mobil that support human rights-related charities.

End Poverty: Includes companies that support poverty-related charities. Top stocks include Citigroup, Coca-Cola and Nike.