What describes a values-based screen in investing?

• A. It aims to avoid investments based on the beliefs or ethical standards of the investors
• B. It focuses on maximizing returns
• C. It excludes only geographic conflicts
• D. It uses financial metrics only

Answer: (A)

Values-based screening in investing is all about aligning a portfolio with the investor’s beliefs and ethical standards. It works by avoiding investments whose products, practices, or impacts conflict with those values, rather than focusing solely on financial performance. For example, an investor might exclude companies involved in tobacco, weapons, or fossil fuels to reflect their ethics. It’s not primarily about maximizing returns, and it goes beyond just geographic considerations or using only financial metrics.