This content was produced for iShares by the foundry @ Meredith Corp. Money editorial staff was not involved in its creation or production.

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How to Invest in What You Believe In

If you’ve ever purchased an item because you knew a portion of the proceeds would go to a cause you care about, then you already know you can make a difference via your money decisions.

Increasingly, investors are choosing to use their portfolios in a similar way, investing in companies whose practices or goals align with their own values. Sustainable investing has been around for decades, but it’s surged in recent years. U.S. investments in sustainable, responsible, and impact investing surged nearly 40% from 2016 to 2018 to nearly $12 trillion, according to a recent study.

The trend is driven not only by an increasing public consciousness around corporate responsibility, but also by the realization that it may be possible to invest sustainably while still participating in potential market growth. Another recent study found that sustainable investing has provided similar risk and return to certain broad markets. That means that you can pursue your personal finance goals like investing for retirement or your children’s education and support causes that you believe in at the same time.

Interested in using your portfolio to make a difference? Here’s how to get started:

Go with funds

One of the easiest ways to build a diversified, sustainable investing portfolio could be with a mix of index-based exposures, such as exchange-traded funds (ETFs). With sustainable ETFs, investors are able to gain exposure to a range of companies that are selected based on sustainable criteria in a cost-efficient vehicle. Investors can build a core portfolio by purchasing just a few ETFs with broad market exposure to U.S. equities, overseas equities, and bonds.

You may already have access to sustainable ETFs via your retirement plan at work. If not, let your human resources department know that you’d be interested in such options. You can also make your own sustainable investments with a brokerage account.

Choose your strategy

There are many ways to approach a sustainable investing portfolio, and there are many investment opportunities. You can, for example, choose to focus on Thematic ETFs, which focus on companies’ performance within a specific environmental, social or governance issue. An example is an ETF that invests in companies with a lower carbon footprint than the broader market.

Stick with it

The market has been volatile in recent years, and that appears set to continue. ETFs can be a great growth strategy for investors who hold them over the long term, which may allow investors to focus less on the day-to-day ups and downs of the market (or your ETF investments). Just as it will likely take years to create meaningful change on carbon emissions or gender diversity, it also takes time for the power of saving and compounding to grow your portfolio.

As sustainable investing grows, so do the opportunities for everyday investors to become involved. ETFs from iShares by BlackRock provide a simple way to get started.

Carefully consider the Funds' investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

Funds that concentrate investments in specific industries, sectors, markets or asset classes may underperform or be more volatile than other industries, sectors, markets or asset classes than the general securities market. A fund's environmental, social and governance (“ESG”) investment strategy limits the types and number of investment opportunities available to the fund and, as a result, the fund may underperform other funds that do not have an ESG focus. A fund's ESG investment strategy may result in the fund investing in securities or industry sectors that underperform the market as a whole or underperform other funds screened for ESG standards.

Diversification and asset allocation may not protect against market risk or loss of principal. Buying and selling shares of ETFs will result in brokerage commissions.

This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.

This material contains general information only and does not take into account an individual's financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decision.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

iSHARES and BLACKROCK are registered trademarks of BlackRock, Inc., or its subsidiaries. All other marks are the property of their respective owners.

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