In April of this year, the FlexShares team at Northern Trust conducted a survey of more than 500 high-net worth investors who work with financial advisors. The survey asked investors a range of questions about ESG investing including, but not limited to: how much they understand it, why they are or aren’t interested, whether their advisors are recommending it, and how and where they’re learning about ESG investing. My guest today will explain how she and her team used the data to identify trends across different generations, genders, and wealth brackets when it comes to ESG investing.
Contrary to economic theory, in recent years funds with an ESG mandate have outperformed the broader market. New research shows that outperformance was caused by increased asset flows to so-called green stocks, raising the prospects for lower returns going forward.
Sustainable investing needs to adapt to new realities without compromising its core principles.
Latin America tilted further left this week as Colombian voters elected Gustavo Petro as president. Come August, the former Bogotá mayor and member of the M-19 guerrilla organization will join the region’s growing list of leftist leaders in a political shift some are likening to the “pink tide” of the late 1990s and early 2000s.
Interest rates aren’t simply the price of borrowing money. They are also information, providing signals telling economic players what to do. Interest rates are in fact the price of time. Low interest rates don’t value time very much. Bad signals produce bad outcomes… and that’s where we are now.
Investors in China can positively influence the behavior of Chinese companies and generate attractive risk-adjusted returns in the long run.
West Texas Intermediate crude oil futures fell below $102 a barrel Wednesday, which represents a 22% drop over the past two weeks and meeting the technical definition of a bear market.
The President today asked Congress for a gasoline tax holiday to alleviate the cost of gasoline and diesel in the country.
Why would I work to increase the profile of an active fund manager? My reasons reflect the increasing pressure on advisors to differentiate themselves and demonstrate value.
Headquartered in Melbourne, Australia, Incitec Pivot is a global leader in the materials sector with an unrelenting focus on Zero Harm, the expectation that its operations should never expose staff to harm or cause environmental incidents.
The terminology ‘Frontier Markets’ inspires images of exotic geographies, colourful politics and investor adventurism.
The world needs a stronger World Trade Organization.
The rising popularity of ESG investing has driven asset flows to green stocks. But new research confirms that the resulting higher valuations forebode lower returns for climate-conscious investors.
Since the start of 2019, investors have plowed more than $300 billion into environmental, social and governance (ESG)-themed exchange traded funds.
Over the last year, we’ve experienced heightened macroeconomic uncertainty with several events impacting society and financial markets.
In our new piece from the Franklin Templeton Institute, we examine the challenge of feeding a growing global population in the midst of climate change, geopolitical shocks and uncertainty.
Persistent … or transitory? It’s the inflation question that has been weighing on financial markets over the last year. As each economic data point trickles out, it is analyzed and re-analyzed, with that focus in mind. But it may be the wrong question to ask.
As proxy season comes to a close, investors and advisors have grappled with company stewardship on a wide variety of issues. But what’s the best way to get a company to listen? Is divestment the way to go? Or must you engage with a company? And how do investors in ETFs and mutual funds make sure their voices are heard at the asset managers they invest with?
Engine No. 1 focuses on engaging with companies constructively to make sure they are taking the costs they impose on society and other stakeholders into account. It operates on the belief that climate and social concerns are economic issues and companies that fail to address them will underperform for the long term.
New research shows that positive returns to ESG portfolios from 2018-2020 were attributed to increased demand for “green“ stocks, raising the question of whether that outperformance will be sustained.
Hedge funds eager to prove that short-selling is a legitimate ESG strategy just got some fresh material to back their case.
Madonna was right. That iPhone on which you may be reading this article is far less important to society than the materials – like steel and plastic – that were used to build it.
Google, Facebook and Microsoft Corp. — three of the world’s biggest corporate buyers of clean power — are sounding the alarm that a nearly $4 billion, Warren Buffett-backed renewable-energy project proposed in Iowa isn’t necessarily in the best interest of customers, including them.
With National 529 Day last month and graduation season underway, the cost of education is at the top of many people’s minds.
Sedans are a rarity and electrics even more so. That’s even as pump prices are surging.
It started with bonds. Now even collateralized debt obligations (CDOs) come in green.
The ESG investment industry may be headed for a reckoning and many companies won’t survive this period of higher interest rates.
It’s not all doom and gloom, though. Due to stratospheric oil and gas prices, energy stocks have been the one bright spot in an otherwise dour market this year. Through the end of May, the S&P Oil & Gas Exploration & Production Index gained an incredible 60%, compared to the S&P 500, which fell about 13%.
The chance that all the necessary pieces will line up that way? Somewhere between slim and none, and as my dad used to say, “Slim left town.” And while my memory isn’t perfect, I don’t believe any speaker at the conference believed in the possibility of a soft landing. And even if we get one, we have serious problems that predate this inflation. They haven’t gone anywhere.
In January Goldman Sachs projected that the FOMC would increase the federal funds rate at every other meeting (each meeting is 6 weeks apart) starting with the March meeting.
It will cost more than the gross domestic product of the entire world to rewire the global economy to run on clean energy.
This commentary provides a look at what we covered in the latest Weekly Insights report. The Weekly Insights Report is part of our entry-level service: presenting some of the key findings from our institutional research service.
Virtual reality is not reality!
There are costs to living a virtuous life; It requires going without.
The US Securities and Exchange Commission is concerned that retail investors are being duped by “greenwashing.”
They are creations of easy credit, beneficiaries of central bank largesse. And now that the era of unconventional monetary policy is over, they’re facing a challenge like never before.
Our fiscal deficit, as measured by the debt-to-GDP ratio, has grown to levels that could impede growth, as predicted by financial theory and confirmed by empirical evidence. Moreover, new research shows that our burgeoning deficit could increase risk premiums for both stocks and bonds.
Summer is right around the corner, and traditionally that’s when families pack their bags and get away for a well-deserved vacation. Since this is the first summer travel season in three years that feels like the before times, airlines and airports are bracing for what is expected to be a particularly busy three months.
It looks like the economy will grow for a while, just not very fast. And we simply don’t know what will happen when the Federal Reserve tightens in the face of a slowing economy.
The war in Ukraine will pour more gasoline on the already raging inflationary fire, threatening to send the global economy into stagflation. Stagflation is a slowdown of economic activity caused by inflation.
The US Securities and Exchange Commission is taking its biggest step yet to stop money managers from misleading investors when they claim their funds are focused on environmental, social or governance issues.
There is increasing awareness among investors of the important role that responsible investing plays in a well-diversified portfolio.
The price of foods, fuels and other essential items are spiraling ever upward as Russia’s war on Ukraine compounds supply-chain woes stemming from the pandemic. Central banks may be in the driving seat when it comes to tackling inflation, but it’s governments that face the fallout and so are compelled to act.
The U.S. was experiencing some of the highest inflation in its history.
Soaring commodity prices have helped drive inflation to 8.5%, by far the highest level in the last few decades.
Since the global financial crisis, assets in private credit have grown exponentially as investors search for yield while protecting against inflation and rising interest rates.
Tesla has grown into a $735 billion company on the back of its breakthrough electric-vehicle engineering. Its own carbon footprint is a small fraction of its peers, and its success in the market has pushed the industry overall away from gas-powered vehicles.
Wylie Tollette, Head of Client Investment Solutions with Franklin Templeton Investment Solutions, joins the head of the Franklin Templeton Institute, Stephen Dover, for a conversation on the recent equity market selloff.
Plan for long-term Inflation that will be fought aggressively by the Fed, higher policy rates, and slower economic growth, according to Raghuram Rajan.
Local-currency debt from developing nations -- which is far more sensitive to a country’s domestic inflationary pressures than dollar denominated equivalents -- has slumped almost 9% this year, the most since at least 2008, according to a Bloomberg index.
Elon Musk has a suggestion for entrepreneurs: Get into lithium mining for juicy margins. It’s a pithy recommendation, but it fails to grasp the complicated challenges for producing more of the metal.
Three powerful forces have unleashed a volatility storm in stock markets this year.
Some big-name investors forecast that Bitcoin will eventually hit $100,000, $1 million or more. It could very well do that, but for now, its price is closer to $0. That’s both a risk and an opportunity.
The launch of the S&P 500 ESG Index in April 2019 signaled an evolution in sustainable investing. The S&P 500 ESG Index was built to underlie strategic, long-term mainstream investment products. Intentionally broad, the index seeks to maintain similar overall industry group weights as the benchmark, while providing an improved sustainability profile.This paper outlines the following index characteristics:
Problems occur when a market shift reduces investment opportunities after a period when investor capital has been scaled up. The current climate portends such a shift.
I don’t care how many PhDs are going to argue against me; direct indexing is Wall Street’s attempt at squeezing more fees out of the America public using advisors as the pawns.
When Aoifinn Devitt created The Fiftyfaces Podcast in 2020, she wanted to showcase the diversity of the world’s investors by telling their stories. Now, she tells Hugo her own story—from her start as a lawyer to her current role as the first female chief investment officer at Moneta, an investment advisor with $27 billion of assets under management. In this wide-ranging discussion, Aoifinn explains how the Russia-Ukraine conflict could change how we think about ESG, whether we’re in a new investing regime, and what she’s learned from podcasting.
Larry Swedroe and Sam Adams’ new book, Your Essential Guide to Sustainable Investing, resolves the confusion in sustainable investing.
Elon Musk, Marc Andreessen and Cathie Wood have spent the past few days on Twitter exchanging ideas about how investing and financial markets work — all in the name of liberating small-fry investors from elite giants that manage and peddle index funds.
The ocean shipping industry, among the world’s biggest polluters, is asking a key regulator to overhaul its emissions directives so that all carriers are working off the same rulebook as they make the expensive changes needed to cut output of harmful carbons.
Dutch power company TenneT Holding BV sold 3.85 billion euros ($4.06 billion) of green debt across four maturities Tuesday, to fund greener electricity grids across Europe. It’s the largest deal for the environmental debt from a company, topping previous efforts from Honda Motor Co. and Engie SA, according to data compiled by Bloomberg.
The Milken Institute Global Conference continues in Beverly Hills, California, bringing together investors, dealmakers, power brokers and celebrities to discuss markets and megatrends. Academics, sports stars, entrepreneurs and politicians among the thousands coming to the Beverly Hilton for the event, which runs through Wednesday.
Draghi has put the Italian economy back on track, but challenges remain.
The environmental group that authored a key proposal against fossil-fuel financing said pushback from the banks it targeted helped ensure the resolution failed.
Russia’s tragic invasion of Ukraine has layered on existing supply imbalances, causing geopolitical uncertainty and a global energy shock.
Environmental, social and governance (ESG) ratings are a popular way to search for companies that meet specific criteria in a responsible investing agenda.
The green energy revolution is making greater progress than expected. Solar and wind power have seen exponential cost declines, and electric vehicles seem to be a market winner. That’s all good news, but improving green energy is not the same as addressing climate change. There is good chance that even optimistic projections for green energy will come true — and carbon emissions will continue to increase.
Firms often consider launching multiple niches rather than focusing on just one. Though sometimes successful, this approach can dissipate your marketing efforts. This article offers guidelines to determine whether having multiple niches is for you.
Few corners of the financial universe have been surrounded by as much marketing froth as ESG, which by some estimates represents more than $40 trillion in assets. According to Morningstar, genuine ESG funds held about $2.7 trillion in managed assets at the end of the fourth quarter.
While recent shocks have made the current inflationary surge and growth slowdown more acute, they are hardly the global economy’s only problems.
On May 29, Colombia could elect its very first leftist president should Gustavo Petro receive a majority of the vote. The former congressman and mayor of the capital city of Bogotá, Petro is an unabashed admirer of and Hugo Chávez.
I didn’t start the fire.
Together, 30 of the biggest asset managers have at least $550 billion invested in oil, gas and coal companies that have expansion plans, and even more alarmingly, they continue to provide “fresh cash to companies that are ignoring climate science,” said Lara Cuvelier, sustainable investment campaigner at Reclaim Finance, a nonprofit which published a scorecard Wednesday grading investment firms on their environmental commitments.
As we have noted in this space in the past, there is a lot of the world that cannot be captured by the most elegant and detailed of spreadsheets.
The fastest inflation in decades and the resulting rush by central banks to raise interest rates are stoking recession fears in financial markets -- worries that are being compounded by the impact of aggressive coronavirus lockdowns in China and the war in Ukraine.
At least 20 ESG-focused exchange-traded funds have launched in the U.S. this year through Wednesday, according to data compiled by Bloomberg. While comparisons are difficult to make because of evolving classifications, that’s roughly double a tally of nine from the same period in 2021, and compares with two in 2020 and just one in 2019.
People tend to associate environmental, social and governance investing with stock-picking, a way to sort through companies based on their ESG practices. But not every investor can be choosy about the companies they own. Big pension, endowment and sovereign wealth funds oversee tens of billions and even trillions of dollars, which means they have to own practically everything.
As a firm, we refrain from delving into politics and political debates.
Easter 2022 arrives this week with its usual egg-hunting and chocolate-bunny traditions, but also with some bitter new realities. Major candy makers such as Hershey Co., Mars Inc. and Nestlé SA need to overhaul their production practices if they want to continue feeding the world’s chocolate habit.
An estimated 30,000 people attended this week’s Bitcoin 2022 conference in Miami, which is rapidly becoming a major global crypto-finance hub.
What role do financial statements play in climate change?
Banks earned record first-quarter fees from arranging green bond deals, while oil, gas and coal companies issued the lowest amount of debt in a decade.
Putin's invasion reminds us that we live in a finite world in which resource prices tend to rise.
As a solar panel was raised onto the roof of their mud-brick home in a Tanzanian village in sight of Mount Kilimanjaro, Akida Saidi and his wife felt giddy at the prospect of entering a new era. In a place where most residents make do with pit latrines instead of toilets and till their fields of maize and pigeon peas with hoes, suddenly having electricity would catapult them into the 21st century.
Transitioning to a net-zero carbon economy* is vitally important, and corporate bonds will play a critical role in the transition.
The good news is that after months of internal debate, the Securities and Exchange Commission has finally proposed rules mandating that publicly traded corporations address climate change.
Do the investment products that advertise themselves as ESG-compliant actually deliver?
Globalization in all its forms, from social to economic to political, has been on the rise since about the 1970s, and I genuinely believe it’s had more benefits than drawbacks on average.
As clients clamor to invest in Environmental, Social, Governance, or ESG funds, advisors need to separate the truth from the tsunami of “greenwashing” that has clouded this rapidly-growing investment segment.
The highest inflation in 40 years has spurred more investors to search for assets that can help offset its bite.
ESG
What HNW Investors are Saying About ESG
In April of this year, the FlexShares team at Northern Trust conducted a survey of more than 500 high-net worth investors who work with financial advisors. The survey asked investors a range of questions about ESG investing including, but not limited to: how much they understand it, why they are or aren’t interested, whether their advisors are recommending it, and how and where they’re learning about ESG investing. My guest today will explain how she and her team used the data to identify trends across different generations, genders, and wealth brackets when it comes to ESG investing.
An Ominous Sign for ESG Investors
Contrary to economic theory, in recent years funds with an ESG mandate have outperformed the broader market. New research shows that outperformance was caused by increased asset flows to so-called green stocks, raising the prospects for lower returns going forward.
Of War And ESG
Sustainable investing needs to adapt to new realities without compromising its core principles.
A New “Pink Tide” in Latin America?
Latin America tilted further left this week as Colombian voters elected Gustavo Petro as president. Come August, the former Bogotá mayor and member of the M-19 guerrilla organization will join the region’s growing list of leftist leaders in a political shift some are likening to the “pink tide” of the late 1990s and early 2000s.
Inflation Reaches Unicorns
Interest rates aren’t simply the price of borrowing money. They are also information, providing signals telling economic players what to do. Interest rates are in fact the price of time. Low interest rates don’t value time very much. Bad signals produce bad outcomes… and that’s where we are now.
How to Invest in China Responsibly
Investors in China can positively influence the behavior of Chinese companies and generate attractive risk-adjusted returns in the long run.
Oil Is in Another Bear Market - and for Good Reason
West Texas Intermediate crude oil futures fell below $102 a barrel Wednesday, which represents a 22% drop over the past two weeks and meeting the technical definition of a bear market.
Cracking and Pivoting
The President today asked Congress for a gasoline tax holiday to alleviate the cost of gasoline and diesel in the country.
Why I Consulted with an Active Fund Manager
Why would I work to increase the profile of an active fund manager? My reasons reflect the increasing pressure on advisors to differentiate themselves and demonstrate value.
Zero Harm Farming and Mining
Headquartered in Melbourne, Australia, Incitec Pivot is a global leader in the materials sector with an unrelenting focus on Zero Harm, the expectation that its operations should never expose staff to harm or cause environmental incidents.
An Established Case and Emerging Trends for Frontier Markets Equity Investing
The terminology ‘Frontier Markets’ inspires images of exotic geographies, colourful politics and investor adventurism.
Governance For Global Trade
The world needs a stronger World Trade Organization.
Why ESG Funds Have Outperformed
The rising popularity of ESG investing has driven asset flows to green stocks. But new research confirms that the resulting higher valuations forebode lower returns for climate-conscious investors.
ESG Investment Cools as the Sector’s Notoriety Grows
Since the start of 2019, investors have plowed more than $300 billion into environmental, social and governance (ESG)-themed exchange traded funds.
The State of Sustainable Investing
Over the last year, we’ve experienced heightened macroeconomic uncertainty with several events impacting society and financial markets.
The Future of Food is Technology
In our new piece from the Franklin Templeton Institute, we examine the challenge of feeding a growing global population in the midst of climate change, geopolitical shocks and uncertainty.
Inflation Risk: Persistent or Transitory is the Wrong Question
Persistent … or transitory? It’s the inflation question that has been weighing on financial markets over the last year. As each economic data point trickles out, it is analyzed and re-analyzed, with that focus in mind. But it may be the wrong question to ask.
Engine No. 1 and Its Compelling Approach to ESG Investing
As proxy season comes to a close, investors and advisors have grappled with company stewardship on a wide variety of issues. But what’s the best way to get a company to listen? Is divestment the way to go? Or must you engage with a company? And how do investors in ETFs and mutual funds make sure their voices are heard at the asset managers they invest with?
Engine No. 1 focuses on engaging with companies constructively to make sure they are taking the costs they impose on society and other stakeholders into account. It operates on the belief that climate and social concerns are economic issues and companies that fail to address them will underperform for the long term.
Sobering News for ESG Investors
New research shows that positive returns to ESG portfolios from 2018-2020 were attributed to increased demand for “green“ stocks, raising the question of whether that outperformance will be sustained.
Hedge Funds Chasing ESG Billions Get Help From Researchers
Hedge funds eager to prove that short-selling is a legitimate ESG strategy just got some fresh material to back their case.
We’re Living in a Material World
Madonna was right. That iPhone on which you may be reading this article is far less important to society than the materials – like steel and plastic – that were used to build it.
It’s Warren Buffett Versus Big Tech in Iowa’s Latest Wind-Farm Debate
Google, Facebook and Microsoft Corp. — three of the world’s biggest corporate buyers of clean power — are sounding the alarm that a nearly $4 billion, Warren Buffett-backed renewable-energy project proposed in Iowa isn’t necessarily in the best interest of customers, including them.
Saving For College: Start Small, But Start Now
With National 529 Day last month and graduation season underway, the cost of education is at the top of many people’s minds.
That Chevy Feels A Lot Better Than a Tesla Right Now
Sedans are a rarity and electrics even more so. That’s even as pump prices are surging.
Does This CDO Come in Green? With ESG Everywhere, Buyers Beware
It started with bonds. Now even collateralized debt obligations (CDOs) come in green.
ESG Investing Is Heading for a Reckoning, Says One Veteran Manager
The ESG investment industry may be headed for a reckoning and many companies won’t survive this period of higher interest rates.
The Upside to Record High Gas Prices
It’s not all doom and gloom, though. Due to stratospheric oil and gas prices, energy stocks have been the one bright spot in an otherwise dour market this year. Through the end of May, the S&P Oil & Gas Exploration & Production Index gained an incredible 60%, compared to the S&P 500, which fell about 13%.
No Soft Landings
The chance that all the necessary pieces will line up that way? Somewhere between slim and none, and as my dad used to say, “Slim left town.” And while my memory isn’t perfect, I don’t believe any speaker at the conference believed in the possibility of a soft landing. And even if we get one, we have serious problems that predate this inflation. They haven’t gone anywhere.
FOMC Inflation Test Coming
In January Goldman Sachs projected that the FOMC would increase the federal funds rate at every other meeting (each meeting is 6 weeks apart) starting with the March meeting.
How to Push Wall Street to Ditch Fossil Fuels for Clean Energy
It will cost more than the gross domestic product of the entire world to rewire the global economy to run on clean energy.
Chart of the Week - Green Boom & Bust
This commentary provides a look at what we covered in the latest Weekly Insights report. The Weekly Insights Report is part of our entry-level service: presenting some of the key findings from our institutional research service.
Stock Market Metaverse
Virtual reality is not reality!
The Virtue Bubble Is About to Burst. Good Riddance.
There are costs to living a virtuous life; It requires going without.
SEC Proposals for ESG Ignore 80 Years of Financial Science
The US Securities and Exchange Commission is concerned that retail investors are being duped by “greenwashing.”
Zombie Firms Face Slow Death in US as Era of Easy Credit Ends
They are creations of easy credit, beneficiaries of central bank largesse. And now that the era of unconventional monetary policy is over, they’re facing a challenge like never before.
The Growing Threat Posed by the Federal Deficit
Our fiscal deficit, as measured by the debt-to-GDP ratio, has grown to levels that could impede growth, as predicted by financial theory and confirmed by empirical evidence. Moreover, new research shows that our burgeoning deficit could increase risk premiums for both stocks and bonds.
3 Airline Stocks to Consider as We Head into the Busy Summer Travel Season
Summer is right around the corner, and traditionally that’s when families pack their bags and get away for a well-deserved vacation. Since this is the first summer travel season in three years that feels like the before times, airlines and airports are bracing for what is expected to be a particularly busy three months.
Rock and a Hard Place
It looks like the economy will grow for a while, just not very fast. And we simply don’t know what will happen when the Federal Reserve tightens in the face of a slowing economy.
Six Reasons Inflation is So High
The war in Ukraine will pour more gasoline on the already raging inflationary fire, threatening to send the global economy into stagflation. Stagflation is a slowdown of economic activity caused by inflation.
SEC to Crack Down on Misleading ESG Claims With Fund Rules
The US Securities and Exchange Commission is taking its biggest step yet to stop money managers from misleading investors when they claim their funds are focused on environmental, social or governance issues.
Responsible Investing Roadmap: Part 1
There is increasing awareness among investors of the important role that responsible investing plays in a well-diversified portfolio.
Inflation Forces Desperate Leaders to Try and Soften the Blow
The price of foods, fuels and other essential items are spiraling ever upward as Russia’s war on Ukraine compounds supply-chain woes stemming from the pandemic. Central banks may be in the driving seat when it comes to tackling inflation, but it’s governments that face the fallout and so are compelled to act.
Which Investments Worked 40 Years Ago When Inflation Was This High?
The U.S. was experiencing some of the highest inflation in its history.
Who Needs Tips When You’ve Got Friends Like This?
Soaring commodity prices have helped drive inflation to 8.5%, by far the highest level in the last few decades.
Not All Private Credit Is Created Equal
Since the global financial crisis, assets in private credit have grown exponentially as investors search for yield while protecting against inflation and rising interest rates.
Tesla’s Removal From S&P Index Sparks Debate About ESG Ratings
Tesla has grown into a $735 billion company on the back of its breakthrough electric-vehicle engineering. Its own carbon footprint is a small fraction of its peers, and its success in the market has pushed the industry overall away from gas-powered vehicles.
Making Sense of the Recent Market Selloffs
Wylie Tollette, Head of Client Investment Solutions with Franklin Templeton Investment Solutions, joins the head of the Franklin Templeton Institute, Stephen Dover, for a conversation on the recent equity market selloff.
Raghuram Rajan: Inflation, Higher Rates and Slower Growth to Come
Plan for long-term Inflation that will be fought aggressively by the Fed, higher policy rates, and slower economic growth, according to Raghuram Rajan.
Bond Traders Reel as Inflation Hits World’s Emerging Local Debt
Local-currency debt from developing nations -- which is far more sensitive to a country’s domestic inflationary pressures than dollar denominated equivalents -- has slumped almost 9% this year, the most since at least 2008, according to a Bloomberg index.
Elon Musk Misses the Big Picture on Lithium Mining
Elon Musk has a suggestion for entrepreneurs: Get into lithium mining for juicy margins. It’s a pithy recommendation, but it fails to grasp the complicated challenges for producing more of the metal.
Defensive Equities: Finding Stability in an Unhinged World
Three powerful forces have unleashed a volatility storm in stock markets this year.
Crypto Winters Have Been Great Times to Buy. Today, Bitcoin Is Half Off
Some big-name investors forecast that Bitcoin will eventually hit $100,000, $1 million or more. It could very well do that, but for now, its price is closer to $0. That’s both a risk and an opportunity.
The S&P 500 ESG Index: Defining the Sustainable Core
The launch of the S&P 500 ESG Index in April 2019 signaled an evolution in sustainable investing. The S&P 500 ESG Index was built to underlie strategic, long-term mainstream investment products. Intentionally broad, the index seeks to maintain similar overall industry group weights as the benchmark, while providing an improved sustainability profile.
This paper outlines the following index characteristics:
Cathie Wood and the Sound of a Changing Market
Problems occur when a market shift reduces investment opportunities after a period when investor capital has been scaled up. The current climate portends such a shift.
19 Reasons to Run Like the Wind from Direct Indexing!
I don’t care how many PhDs are going to argue against me; direct indexing is Wall Street’s attempt at squeezing more fees out of the America public using advisors as the pawns.
Investing in People
When Aoifinn Devitt created The Fiftyfaces Podcast in 2020, she wanted to showcase the diversity of the world’s investors by telling their stories. Now, she tells Hugo her own story—from her start as a lawyer to her current role as the first female chief investment officer at Moneta, an investment advisor with $27 billion of assets under management. In this wide-ranging discussion, Aoifinn explains how the Russia-Ukraine conflict could change how we think about ESG, whether we’re in a new investing regime, and what she’s learned from podcasting.
Book Review: Your Essential Guide to Sustainable Investing
Larry Swedroe and Sam Adams’ new book, Your Essential Guide to Sustainable Investing, resolves the confusion in sustainable investing.
Wood and Musk Turn Into Dumb Money on Index Investing
Elon Musk, Marc Andreessen and Cathie Wood have spent the past few days on Twitter exchanging ideas about how investing and financial markets work — all in the name of liberating small-fry investors from elite giants that manage and peddle index funds.
Top Sea Polluters Beg for Climate Rules That No Rival Can Avoid
The ocean shipping industry, among the world’s biggest polluters, is asking a key regulator to overhaul its emissions directives so that all carriers are working off the same rulebook as they make the expensive changes needed to cut output of harmful carbons.
Jumbo Green Deal Wakes Up ESG Market
Dutch power company TenneT Holding BV sold 3.85 billion euros ($4.06 billion) of green debt across four maturities Tuesday, to fund greener electricity grids across Europe. It’s the largest deal for the environmental debt from a company, topping previous efforts from Honda Motor Co. and Engie SA, according to data compiled by Bloomberg.
Fed ‘Not Out of Bullets’ Yet to Control Inflation: Milken Update
The Milken Institute Global Conference continues in Beverly Hills, California, bringing together investors, dealmakers, power brokers and celebrities to discuss markets and megatrends. Academics, sports stars, entrepreneurs and politicians among the thousands coming to the Beverly Hilton for the event, which runs through Wednesday.
The Italian Job
Draghi has put the Italian economy back on track, but challenges remain.
Wall Street Climate Semantics Skew Fossil-Fuel Financing Votes
The environmental group that authored a key proposal against fossil-fuel financing said pushback from the banks it targeted helped ensure the resolution failed.
The Transition To a Low Carbon Economy
Russia’s tragic invasion of Ukraine has layered on existing supply imbalances, causing geopolitical uncertainty and a global energy shock.
ESG Ratings: Solution or Starting Point?
Environmental, social and governance (ESG) ratings are a popular way to search for companies that meet specific criteria in a responsible investing agenda.
Energy’s Future Is Both Cleaner and Dirtier
The green energy revolution is making greater progress than expected. Solar and wind power have seen exponential cost declines, and electric vehicles seem to be a market winner. That’s all good news, but improving green energy is not the same as addressing climate change. There is good chance that even optimistic projections for green energy will come true — and carbon emissions will continue to increase.
Should Advisors Have More Than One Niche?
Firms often consider launching multiple niches rather than focusing on just one. Though sometimes successful, this approach can dissipate your marketing efforts. This article offers guidelines to determine whether having multiple niches is for you.
Fund Managers Doing Bogus ESG ‘Engagement’ Are Put on Notice
Few corners of the financial universe have been surrounded by as much marketing froth as ESG, which by some estimates represents more than $40 trillion in assets. According to Morningstar, genuine ESG funds held about $2.7 trillion in managed assets at the end of the fourth quarter.
The Gathering Stagflationary Storm
While recent shocks have made the current inflationary surge and growth slowdown more acute, they are hardly the global economy’s only problems.
Colombia at Risk of Electing Its First Socialist President
On May 29, Colombia could elect its very first leftist president should Gustavo Petro receive a majority of the vote. The former congressman and mayor of the capital city of Bogotá, Petro is an unabashed admirer of and Hugo Chávez.
Let It Be?
I didn’t start the fire.
Climate Crisis? Fund Managers Are Sticking With Fossil Fuel
Together, 30 of the biggest asset managers have at least $550 billion invested in oil, gas and coal companies that have expansion plans, and even more alarmingly, they continue to provide “fresh cash to companies that are ignoring climate science,” said Lara Cuvelier, sustainable investment campaigner at Reclaim Finance, a nonprofit which published a scorecard Wednesday grading investment firms on their environmental commitments.
Herding the Gray Rhinos
As we have noted in this space in the past, there is a lot of the world that cannot be captured by the most elegant and detailed of spreadsheets.
Recession Risks Duel Resilience Hopes in Global Economy Outlook
The fastest inflation in decades and the resulting rush by central banks to raise interest rates are stoking recession fears in financial markets -- worries that are being compounded by the impact of aggressive coronavirus lockdowns in China and the war in Ukraine.
Do-Good Funds Are Booming as ETF Launches Double From Last Year
At least 20 ESG-focused exchange-traded funds have launched in the U.S. this year through Wednesday, according to data compiled by Bloomberg. While comparisons are difficult to make because of evolving classifications, that’s roughly double a tally of nine from the same period in 2021, and compares with two in 2020 and just one in 2019.
Institutional Investors Are Flexing Their ESG Muscles
People tend to associate environmental, social and governance investing with stock-picking, a way to sort through companies based on their ESG practices. But not every investor can be choosy about the companies they own. Big pension, endowment and sovereign wealth funds oversee tens of billions and even trillions of dollars, which means they have to own practically everything.
Energy Desperados
As a firm, we refrain from delving into politics and political debates.
Chocolate Bunnies Can Teach Us to Save Our Food Supply
Easter 2022 arrives this week with its usual egg-hunting and chocolate-bunny traditions, but also with some bitter new realities. Major candy makers such as Hershey Co., Mars Inc. and Nestlé SA need to overhaul their production practices if they want to continue feeding the world’s chocolate habit.
Bitcoin 2022: We’re Still So Early
An estimated 30,000 people attended this week’s Bitcoin 2022 conference in Miami, which is rapidly becoming a major global crypto-finance hub.
Emission Disclosures: Sunlight on Climate Risks
What role do financial statements play in climate change?
Cash Flood, Not Green Dreams, Behind Slump in Oil Bond Sales
Banks earned record first-quarter fees from arranging green bond deals, while oil, gas and coal companies issued the lowest amount of debt in a decade.
Putin's Invasion Reminds Us That We Live In A Finite World
Putin's invasion reminds us that we live in a finite world in which resource prices tend to rise.
Tesla-Backed Startup Made Cheap Power a Debt Burden for the World’s Poorest
As a solar panel was raised onto the roof of their mud-brick home in a Tanzanian village in sight of Mount Kilimanjaro, Akida Saidi and his wife felt giddy at the prospect of entering a new era. In a place where most residents make do with pit latrines instead of toilets and till their fields of maize and pigeon peas with hoes, suddenly having electricity would catapult them into the 21st century.
Herding the Gray Rhinos
As we have noted in this space in the past, there is a lot of the world that cannot be captured by the most elegant and detailed of spreadsheets.
Understanding Your Bond Portfolio’s Carbon Footprint
Transitioning to a net-zero carbon economy* is vitally important, and corporate bonds will play a critical role in the transition.
The SEC Is Heading Toward a Climate Train Wreck
The good news is that after months of internal debate, the Securities and Exchange Commission has finally proposed rules mandating that publicly traded corporations address climate change.
Burton Malkiel: Does ESG Investing Deliver on its Promises?
Do the investment products that advertise themselves as ESG-compliant actually deliver?
Is This the End of Globalization?
Globalization in all its forms, from social to economic to political, has been on the rise since about the 1970s, and I genuinely believe it’s had more benefits than drawbacks on average.
Greenwashing Amongst ESG: Finding True ESG Value
As clients clamor to invest in Environmental, Social, Governance, or ESG funds, advisors need to separate the truth from the tsunami of “greenwashing” that has clouded this rapidly-growing investment segment.
Balance Is the Watchword with Commodities Exposure
The highest inflation in 40 years has spurred more investors to search for assets that can help offset its bite.