Investing in Sustainable Assets through Self-Directed Retirement Plans

Published on October 17, 2017

A recent article on Bloomberg.com highlighted how investments into “green” and sustainable assets that deliver a financial and societal return on those investments are less of a niche category and are becoming more popular.

Commonly termed values-based, socially responsible or sustainable investing, investments in this asset class totaled approximately $22.9 trillion last year, up 25 percent from 2014 (according to the 2016 Global Sustainable Investments Review). Europe, the U.S. and Canada were the largest in terms of assets with Japan catching up due to quick growth. The article states that Japan’s Government Pension Investment Fund plans to track environmental, social and governance (ESG) indexes.

Green investments in a self-directed portfolio

If you know and understand sustainable investing, you could make a positive change to your retirement portfolio and the environment by including “green assets” in a self-directed retirement plan. These plans may include a broad array of nontraditional investments; for savvy investors who already understand sustainable or certain socially responsible asset types, self-direction can be a lucrative strategy.

Some examples of green investments your self-directed retirement plan could include are:

• Renewable energy – wind or solar farms, water energy
• Biofuel manufacturing and distribution
• E-waste recycling, construction recycling companies
• LEED-certified or other energy-efficient real estate
• Clean transportation – clean-emission bus lines, hybrid or electric vehicles, light rail
• Tree plantations, farmland
• Eco-friendly/organic cosmetics, accessories, clothing*

*Now that more people may make equity investments, startup companies in this arena will be looking for venture capital. Your self-directed IRA can make equity investments.

If you want to use your investment skills to tap into this growing asset class, Open a self-directed retirement plan at Next Generation Services and start investing. These plans enjoy all the same tax advantages of regular retirement plans with the bonus of the investor being able to include many more types of investments. Next Generation executes the transactions based on your instructions and manages all the paperwork and mandatory filing; we also hold the assets through our sister company, Next Generation Trust Company, for a more streamlined experience.

Interested in learning more? You can also sign up to read our white papers and learn about the various aspects of self-direction as a retirement wealth-building strategy. Our helpful professionals are always here to answer your questions or help you get started. Contact Next Generation Services at Info@NextGenerationTrust.com or 1-888-857-8058 for assistance.