Values-Driven Investing: The Rise of Ethics and ESG

Another defining trait of modern investors is their focus on purpose. The younger generations are nearly twice as likely to prioritize ethical or values-based investing compared to their older counterparts. This includes strategies rooted in environmental, social, and governance (ESG) criteria, as well as impact investing—where financial decisions are made based on measurable societal benefit, not just monetary returns.

In many Asian markets, this is particularly evident. Younger HNWIs are seeking ways to combat environmental degradation and rising inequality, channeling their investments toward sustainable energy, education, and inclusive growth sectors.

But this trend isn’t limited to Asia. Across North America, Europe, and the Middle East, investors are voting with their capital—favoring businesses that are transparent, equitable, and environmentally responsible. These shifts are also influencing how wealth managers build portfolios, with ESG screening and sustainability ratings becoming a standard part of the due diligence process.

Investing, for many Millennials and Gen Xers, is a reflection of personal values. They want their money to have meaning—and they’re willing to accept slightly lower returns in exchange for alignment with their principles.

Experimenting Beyond the Traditional Portfolio

While Baby Boomers have typically relied on traditional investment vehicles—mutual funds, blue-chip stocks, GICs—today’s younger investors are increasingly drawn to alternative assets.

This includes:

• Private equity and venture capital, where they can support innovative startups and potentially access higher returns.

• Hedge funds and structured products, which allow for more complex, tactical strategies.

• Digital assets like cryptocurrency and tokenized securities, reflecting a broader comfort with digital innovation and disruption.

Younger investors see these alternatives not as risky gambles but as essential elements of a modern, resilient portfolio. Their approach is characterized by flexibility, experimentation, and adaptability—an understanding that long-term growth may come from unconventional sources.

In fact, many are building “barbell” portfolios: combining high-risk, high-reward investments on one end with ultra-conservative holdings (like cash or bonds) on the other. This allows for agility while maintaining downside protection.