What Do You Want from Your Investments?
A look into “ESG” Investing:
as anyone ever asked you what you want from your investments aside from a given return? It might seem like an odd question but it’s worth exploring. Over the years, many people have approached us about wanting to “feel good” about their investment portfolio. Of course, this can mean something different to everyone. But one theme we are seeing more and more is the desire to invest in companies that are focusing on sustainability and various forms of social responsibility.
Examples of this approach can include: investing in companies that are actively working to reduce their carbon footprint, businesses that are highly ranked for their customer service, treatment of their employees, or their product safety. While these examples may seem quite different from one another, they are all examples of companies that are working towards achieving some kind of good citizenship.
This socially conscious style of investing is referred to as Environmental, Social and Governance Investing, or ESG. Instead of taking an exclusive approach to your portfolio and removing specific companies that do not align with your values, ESG takes a more inclusive approach to investing and identifies companies that are having a positive impact on their business, the community or the environment. It is an approach that focuses on business fundamentals and quality.
It is also believed that adhering to ESG principles assists in managing risk and company vulnerability. It is through this additional layer of due-diligence that portfolio managers might identify strengths and weaknesses.
If you watched our video on ESG investing, you’ll remember that we stated how research is indicating that companies focusing on how their business practices today are affecting trends in the future, it is believed that this is how companies are supporting their own longevity, job creation and long-term stewardship of profitability.
So, the next time someone asks you what you want from your investments, consider taking your time to think about if sustainable investing is one of those ideas that come to mind. We understand that every investor’s values and goals are different. And with that in mind, we are here to support you if ESG investing is something that you would like to explore.
Vahanian & Associates (“Vahanian”) created this presentation for its website. Any other distribution of this presentation is strictly prohibited. While the content presented is believed to be factual and up to date, it is based on information obtained from a variety of sources. Vahanian believes this information is reliable, however, it has not necessarily been independently verified. Vahanian does not guarantee the complete accuracy of all data in this blog post, and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of Vahanian as of the date of publication and are subject to change. This blog post does not constitute personalized advice from Vahanian or its affiliated investment professionals, or a solicitation to execute specific securities transactions. Vahanian is not a law firm and does not intend for any content to be construed as legal advice. Readers should not use any of this content as the sole basis for any investment, financial planning, tax, legal or other decisions. Rather, Vahanian recommends that readers consult Vahanian and their other professional advisers (including their lawyers and accountants) and consider independent due diligence before implementing any of the options directly or indirectly referenced in this blog post.
Past performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by Vahanian, will be profitable or equal any historical performance level. Any index performance data directly or indirectly referenced in this blog post is based on data from the respective copyright holders, trademark holders, or publication/distribution right owners of each index. The indexes do not reflect the deduction of transaction fees, custodial charges, or management fees, which would decrease historical performance results. Indexes are unmanaged, and investors cannot invest directly in an index.