How does Swell choose its stocks?

Nicole Sara Sivens
April 5, 2018
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Swell uses a rules-based approach to stock selection. Rules-based means that Swell's thematic portfolios are constructed using a combination of qualitative and quantitative impact and financial data.

Quantitative data measurements are taken using tools like rulers and thermometers – think measuring or counting something.

Qualitative data measurements are observed using your senses. Often what matters cannot be measured, like ethics, integrity, and intentional leadership – that's the space where qualitative analysis lives.

Previous generations innovated because they wanted to. Today, we innovate because we have to.

Resources are becoming scarce; innovation will create a better world. It’s a market opportunity, sure, but it’s also the new normal.

We start our portfolio construction process by thinking about the challenges facing our planet. In the face of dwindling resources, we ask: Which companies stand to benefit financially by innovating for change?

What do we look for in a portfolio company?

Here’s what we like in an innovative company:

They work with the United Nations

Our companies are all in line with one of the 17 UN Sustainable Development Goals. We use these goals as our north star because we believe in mobilizing capital to work toward a better, healthier world.  

They practice what they preach

They have to make their money by solving global challenges

They’re always striving to do better

Continued success keeps companies in our good graces. No business is perfect, we know! But constant improvements make the difference.

They share the good news with the world

Our companies are held to a high standard by worldwide organizations, and you can read more about that here.  

What about risk?

Once we choose our companies, we make sure that our portfolios have the right balance of opportunity for our investors. Our portfolios are made up of some larger firms, but primarily our holdings are smaller companies, and more growth-oriented. By adding in some larger, more established companies with successful track records, the risk is mitigated a bit.

Who keeps an eye on the companies?

Both the impact and portfolio management teams keep an eye on things on a daily basis. And  each quarter we take a look at our total package to make sure they are still in good shape.

What if a company doesn’t meet our standards anymore?

We believe our portfolios are made up of the companies that are the best of the best. We also know that companies are not perfect and sometimes they make decisions that don’t meet our benchmarks. If it does, we do an immediate assessment and decide how to proceed based on all available information.

Does all this affect returns?

You can check out our Portfolios page for more detailed info, but here’s the short version: Not at all! We believe we're identifying market opportunities, and therefore, you're not sacrificing returns when you invest in impact You absolutely can combine purpose and profit.

We analyze global mega-trends to identify themes that offer high impact and potentially high returns. Check out it out: 

Swell's portfolio performance vs. the S&P 500
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