Investors typically want to buy assets for their portfolios that provide the best possible return on their money. But today it’s becoming easier for investors to also choose investments that reflect their values, such as supporting the LGBTQ+ community.

“Investments in companies that support the LGBTQ+ community pay more dividends than just numerical returns,” says Jonathan Lovitz, Senior Vice President of the National LGBT Chamber of Commerce (NGLCC). “These investments also support success, opportunity and improved access to the American Dream for all Americans.”

Equality is good for business, and investments that support the small businesses and large corporations fighting for equality are even better. Here’s how you can allocate your investment dollars to support LGBTQ+ equality while also providing the returns you need for your financial goals.

How to Find Investments That Support the LGBTQ+ Community

Many financial advisors recommend you start your search for investments that support the LGBT community at Human Rights Campaign’s Corporate Equality Index.

“The [index] provides some great insight as to whether companies are meeting the needs of the LGBTQIA+ community with robust workplace policies,” says Jay Lipman, president and sustainable asset manager at Ethic, a tech-driven asset manager that powers the creation of sustainable investment portfolios.

Lipman says the index identifies companies that implement policies tailored to the needs of LGBTQ+ employees. These include clearly defining sexual orientation and gender identity in their non-discrimination policies, granting benefits to domestic partners, offering transgender-inclusive benefits, displaying organizational LGBTQ+ competency and implementing non-discrimination standards for contractors and suppliers.

Among the firms included in the 2022 index, a record-breaking 842 companies received a top score of 100% for their commitment to LGBTQ+ equality.

“For investors who are just beginning their portfolio, this list is a great starting point,” says Meghan Lape-Lafevre, certified financial planner (CFP), founder and COO of Conscious Impact Financial Planning. “For seasoned investors, this list may be able to confirm investments that should be kept when reviewing their portfolio for social responsibility.”

For investors with existing holdings managed by a financial advisor, Lape-Lafevre recommends screening portfolios using YourStake. This tool is designed for financial professionals and can analyze investment portfolios to see how component assets stack up against over 50 social responsibility factors.

Whether you use Human Rights Campaign’s Corporate Equality Index or YourStake, once you’ve narrowed down a list of potential investments that align with your goals and interests, check out each company’s website.

You’ll likely find information about policies and inclusion efforts in a company’s careers or company culture section. You can also look at listings on Glassdoor.com to see reviews from current and former employees of a particular company. They can help reinforce a commitment to inclusive policies or expose gaps that might be deal breakers for your investment dollars.

Notable LGBTQ+ Friendly Companies

Leading U.S. large-cap companies with very strong ratings on Human Rights Campaign’s Corporate Equality Index include Walmart (WMT), Amazon.com Inc (AMZN) and Apple Inc. (AAPL).

Other companies of note include JPMorgan Chase (JPM), Alphabet (GOOGL) and Verizon Communications Inc. (VZ).

While these are popular companies you might have heard of, their inclusion here isn’t an endorsement to purchase them. Instead, this listing is meant to start your creative wheels spinning and to inspire thoughts of other companies you know. From there, you can research to see if your favorite company is well-rated in LGBTQ+ advocacy.

Notable LGBTQ+ Friendly Mutual Funds and ETFs

“Though individual stocks can be an excellent addition to a portfolio, I have to admit I personally favor ETFs,” says Lape-Lafevre. “In exchange for a maintenance fee, you have a dedicated professional who takes care of selection, diversification and rebalancing and does so within a specific sector or focused outcome.”

This kind of broad, index-based approach to investing is recommended by most financial advisors and even investing greats like Warren Buffett and Vanguard founder John Bogle to optimize returns and minimize fees and risks.

To seed your search for funds that can do this in a socially responsible and LGBTQ-friendly way, you can start by researching:

  • Vanguard FTSE Social Index Fund (VFTAX); expense ratio: 0.12%.
  • Change Finance US Large Cap Fossil Fuel-Free ETF (CHGX); expense ratio: 0.49%.
  • iShares MSCI KLD 400 Social ETF (DSI); expense ratio: 0.25%.
  • Vanguard ESG U.S. Stock ETF (ESGV); expense ratio: 0.09%.
  • SPDR SSGA Gender Diversity Index ETF (SHE); expense ratio: 0.20%.

While some of the funds listed above aren’t exclusively committed to LGBTQ+, they all promote gender diversity and other criteria tracked for socially responsible investing (SRI) with an eye toward LGBTQ+ inclusion.

For investors looking for some automation and assistance with choosing LGBTQ+ friendly investments, some robo-advisors also advertise their portfolios or portfolio options as adhering to SRI guidelines. These include:

How Do LGBTQ+ Investments Perform?

According to a McKinsey study, diversity and inclusion initiatives pay serious dividends for the companies that invest in them. The firm’s 2019 report found that:

  • Companies in the top quartile for gender diversity were 25% more likely to experience higher profitability than fourth quartile companies.
  • Companies in the top quartile for racial and cultural diversity outperformed fourth quartile companies by 36% in profitability.

Thus, investments in companies investing in cultural diversity through LGBTQ-inclusive policies appear to have a higher likelihood of outperforming their less inclusive peers. Investors should be careful about jumping to conclusions, though.

“We don’t suggest that there is a causal relationship between investment performance and [company] policies, but it just so happens that top companies do indeed have strong LGBTQ-friendly policies in place,” says Pierce Crosby, general manager of TradingView, an online trading community with over 10 million users.

Company health goes all the way down to how valued a company’s employees feel and a company’s ability to attract and retain top-tier talent. Those two qualities can create higher employee satisfaction, decrease turnover and improve a company’s overall performance in the marketplace—all of which ultimately contribute to a company’s profitability.

Having an SRI designation or listing isn’t enough to recommend a company, though. Even if a stock has ESG qualities, investors should spend some time researching it on a deeper level.

“Generally speaking, socially responsible investments have been competitive with or have exceeded expectations as a whole,” says Lape-Lafevre. “Though ultimately, it still comes down to technical analysis and evaluating the stock on more than just their socially responsible criteria. Socially responsible behavior cannot compensate for a terrible business plan.”

Related: Best ESG Funds

How Can I Start Investing in LGBTQ+ Friendly Investments?

First, you’ll need to decide where you’ll be holding your investments. If you’re buying stocks, mutual funds and ETFs, you’ll need a brokerage account through an online brokerage or your financial advisor. You can also start your SRI efforts through a robo-advisor that offers investment portfolios that align with your LGBTQ+ investment goals. In addition, LGBT-friendly investments may be available through your company-sponsored retirement plan.

In all cases, you’ll need to have funds available to invest and then place the orders. From that point on, you’re a shareholder, and regular account reviews are always a good idea to keep track of performance and any rebalancing needs.

How Can I Find an LBGTQ+ Friendly Financial Advisor?

Sometimes it helps to have someone who understands your identity, priorities and how the two work together in your finances. If you’d like to find an LGBTQ-friendly financial advisor, here are some places to start your search:

Word of mouth is also a powerful recommendation tool. Don’t be shy about putting your request out to selected friends or your social media audience. You may find just the referral you were looking for from someone you already trust.