The past three months have been an extraordinary period for all of us, with ramifications that go far beyond investment markets. The sheer scale of what has happened in recent weeks is staggering, from unemployment claims in the US to mass furloughing in the UK, the hundreds of billions of pounds pledged by the chancellor to bolster the economy, and the trillions of dollars of US Federal Reserve support.
Stewart Investors, which manages the Pacific Assets (PAC) trust, has long been a supporter of a little-known, Edinburgh-based charity called The Library of Mistakes. Its mission is that “by studying financial history we hope to improve financial understanding one mistake at a time”. This thinking also informs the trust’s investment style. Managers David Gait and Doug Ledingham believe that only by understanding the history of individual companies and their management teams can they avoid the pitfalls.
Satellite images reveal the extent to which pollution has fallen in cities around the world since lockdowns have been introduced. The difference is huge in places such as Delhi where a fog of pollution normally hangs over the city. Blue sky has now appeared. This situation is repeated all around the world.
IFAs have seen a sharp rise in the number of investors wanting to put their money to work for environmental and social good since the start of the Covid-19 pandemic.
Federated Hermes conducted a poll of 200 UK IFAs and found that 85% have seen a rise in client requests to allocate more money to ESG funds.
Since the 1970s, there have been four periods during which global equities have fallen more than 10% in five days; the 1987 crash, the 2008 global financial crisis, the 2011 eurozone crisis, and the first few months of 2020.
Each of these events has occurred in very different circumstances and brought its own specific challenges. The bear market of early 2020 is no exception, with a severe downturn caused by an emerging understanding of the economic consequences arising from the coronavirus.
BlackRock chief executive officer Larry Fink signed two letters at the start of the year that signalled a tipping point for sustainable investing. In his annual letters to clients, the head of the world’s largest asset manager said his firm would divest from thermal coal and put sustainability at the heart of its investment decisions.
The past decade has seen the explosion in popularity of ESG (environmental, social and governance) funds. Many arguments have been made as to why investors should consider them, from the moral to the performance based.
Welcome to our first update of 2020 for the Money Observer ethical portfolio. A great deal has changed since our last piece – not only does Prime Minister Boris Johnson now command a substantial parliamentary majority, but the UK has also now left the European Union. How has this impacted our investment selections over the past three months?
You would have to have been living under a rock this year to have missed the buzz around sustainable investing. With climate change, plastic pollution and other environmental and social issues making headlines around the world, investing for a positive impact is becoming increasingly important.
One of the more cynical interpretations of the rise of ESG investing is that it offers active managers a chance to restate their worth, as more investors shift towards low-fee passive investment products. While the market may be harder to beat, active managers can better determine the ESG credentials of companies.