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Swell Investing Review

securely through Swell Investing's website

1 Minute Review

Swells is a startup venture backed by a 150-year old insurance company called Pacific Life based in Los Angeles. The firm was floated with the objective of providing a better investment option for people, who care about where their money goes and what it supports. And how it does this is, by identifying high-potential, high-impact themes, focused on a positive future, from healthcare innovation to clean tech. Dividends over $1 are automatically routed to the investment pool, thereby swelling the investable funds. Learn More

Best For

  • Hands-off investors
  • Investors having less investable funds
  • Environment-conscious & socially responsible investors

Pros

  • Being a robo-advisor, objectivity is maintained in stock picking
  • Serves the dual-purpose of multiplying money and at the same time, contributing in a small way to socially responsible ventures
  • Since Swell invests in individual stocks and not ETFs, no expense ratio is involved

Cons

  • Extremely volatile portfolios, given the small market cap of most stocks forming Swell’s portfolio
  • Lack of diversification in portfolio

Who Uses Swell?

Swell might be the right choice for investors, who do not have huge investable funds at their disposal. Being a robo-advisor, it serves green horns and passive investors well. Over and above all these, the firm is a God-send option for those individuals, who have burden for environmental well-being and sustainable use of resources.

Beginners & Passive Investors

Given that stock picking is algorithm-driven, a novice investor or investors who are seeking to circumvent the arduous tasks of portfolio selection and tracking could find Swell an able ally in their investment journey.

Investors With Limited Corpus

The low initial deposit and the lack of trading fees is an attractive selling point for the firm, drawing into its fold investors with less investable funds.

Socially-conscious Investors

If the shrinking of ozone layer, contamination of food with pesticide and fertilizer residues, depletion of non-renewable energy sources etc. are some issues that keep you wide awake, well into the night, Swell is an avenue for seeking redemption. Investing through Swell will leave you content of having done your bit for the humanity.

Commission

The company has a minimum investment limit of $50, while it charges no trading fees. Annual fee amounts to 0.75 percent of your investment funds.

Research

While constructing its portfolio based on two important factors, namely impact and performance, Swell uses both financial analysis and its proprietary impact criteria. Thus, Swell’s stock screening is a three-step process.

  • Screen each company for a commitment to positive impact across multiple areas of its business
  • Research each company screened to determine how it derives revenues and ensuring that it actively delivers impact to the world
  • As the final step, financial health and stock valuation is analyzed.

The firm has a blog on its website, which deals with many investment topics, its portfolios etc. under the head ‘By the Numbers’, ‘The Stack Up’, ‘Movers and Shakers’ and ‘Portfolios.’

Customer Support

Swell’s website has a webpage meant for support. The top right corner of the page has a text box to entire search terms or query and a search button, which when clicked fetches returns for your query.

The page also has a primer for investing, titled ‘Impact Investing 101.’ The segment is structured as a Question & Answer format. With the answers to each question, the firm provides links to articles on that topic.

Email support is available through the email id Support@swellinvesting.com.

Although the firm advocates contacting via email, it promises phone communication if it is absolutely essential.

Ease of use

Money invested through Swell is held in a brokerage account in the investor’s name at Folio Investments, Inc., which acts as custodian to safeguard his assets and to provide clearing and execution of his transactions, based on his instructions. Swell’s function is one of an investment advisor.

Funding of a Swell account is done through Plaid, a third-party direct bank link, or through micro-deposits

Asset Classes (tradable securities)

The firm’s portfolios consist of publicly-traded companies, which are poised to grow based on important social and environmental trends. The sectors forming part of Swell’s portfolio include:

  • Renewable energy
  • Green tech
  • Disease eradication
  • Clean water
  • Zero waste
  • Healthy living

The firm’s portfolios are optimized for risk and are rebalanced quarterly. Swell offers retirement IRAs and flexible brokerage accounts. It provides investor education by supplying information card for each company in its portfolio.

Flexible Swell is a taxable brokerage account, which allows withdrawal of money any time without penalty.

Meanwhile, Swell IRAs or individual retirement accounts offered by it can be a traditional IRA account, Roth account or SEP account.

Final Thoughts

Profiting with a purpose – This phrase better applies to Swell, which helps an investor make a profit as well as guide him/her through purpose-driven investment. However, it cannot be a one-stop shop for your investment interest particularly because of its one-pronged approach, lack of advanced tools & technology and limited opportunity for tax-advantaged investment.

Use Swell if:

  • You have an impact investment drive
  • You wish to steer clear of betting on social irresponsible companies and ventures
  • You need hand-holding through your investment journey

Don’t Use Swell if:

  • You desire to have a diverse set of assets and asset classes in your portfolio
  •     You are crazy about researching deeply, crunching numbers and carefully evaluating the investment options before you