Invest
Why you should think about ESG investing this World Environment Day
Today marks World Environment Day, with experts using the occasion to flag how Aussies can benefit by investing in a way that helps the planet.
Why you should think about ESG investing this World Environment Day
Today marks World Environment Day, with experts using the occasion to flag how Aussies can benefit by investing in a way that helps the planet.
During an iShare ETF Media Roundtable, experts highlighted how investors who invest in a sustainable manner often beat their respective benchmarks.
Blackrock Australia’s head of iShares ETF, Christian Obrist, said gone are the days where investors feel they need to sacrifice returns for sustainable investing.
“In the past, there was a misconception that if you wanted to invest in a sustainable manner, that you had to give up on returns, but that isn’t the case, and I think that is coming more and more to the forefront,” Mr Obrist said.
“We’ve seen investor demand and the conversations we have with investors point to growing interest and growing knowledge around the space.
“Of course, ESG is very broad going from basic screens that might include five areas such as fossil fuels, climate change or controversial weapons all the way to advanced strategies.”
Refinitiv global head of research Robert Jenkins explained that ESG investments perform better during times of stress, with the COVID-19 pandemic being a prime example.
He highlighted that investors who believe they are doing the right thing will buy riskier assets for a long period of time.
“Collectively, ESG investors showed a little more appetite for risk, and stuck to their long-term allocation strategies.
“In the broader funds market, investors sold out of fixed income, held back on equities and piled into money markets. ESG displayed a muted version of these three trends by going flat in fixed income, tempering inflows into equities, and revisiting money markets after a quarter of negligible flows,” Mr Jenkins said.
Another major tailwind for the sector was the falling price of oil as lockdowns forced global consumers to stay inside.
“In fact, the first part of the market sell-off in carbon-intensive industries was likely more tied to the oil market gyrations and less about COVID-19. However, the global pandemic impacts were felt more in the latter half of March and sealed the performance fate of these stocks,” Mr Jenkins said.
However, the researcher was quick to highlight the difference between the two products making comparisons hard.
“In spite of that, the outperformance of global ESG funds versus the broader market was a little more than 1 percent on a net basis, with about 54 percent of ESG funds outpacing their conventional funds peers.
“Considering the massive differences in the number of non-ESG funds and the breadth of product types, this is like comparing apples with oranges, but worth keeping an eye on,” Mr Jenkins concluded.
Did you enjoy this article? You may also be interested in:
About the author
About the author
Mutual funds
Sold your stocks during the dip last year? Here’s how much it might have cost you
If you cashed out during last year’s COVID-19 crash, here’s how much it might have cost you. ...Read more
Mutual funds
‘True to label’ warning again given to fund managers: ASIC
Consumers should be wary: Fund managers aren’t doing enough to ensure products are “true to label”, with a number of product names not aligning with underlying assets in those funds. ...Read more
Mutual funds
Move over, mainstream: ESG excels
Responsible investing is proving its worth in the investment game, beating out the total return of the S&P/ASX 300 over the last decade. ...Read more
Mutual funds
ASIC makes frozen funds easier to access
A new relief measure will enable investors suffering hardship to access their investment money even where managed funds have been “frozen” to maintain fund stability through the COVID-19 pandemic....Read more
Mutual funds
Is it time to put a food-style label on investment products?
Much like the food people eat, investors are being told they need to know what they are buying before purchasing exchange-traded products, as many are unaware of the ramifications if they don’t. ...Read more
Mutual funds
Is a model portfolio the way to go during a downturn?
The use of model portfolios – a type of managed account – can provide investors with a range of benefits during a downturn such as the COVID-19 crisis, an investment expert has touted. ...Read more
Mutual funds
Retail drag on REITs not all doom and gloom
In the world of REITs, COVID-19 is a human and economic crisis but not another GFC, according to an investment group. ...Read more
Mutual funds
Is opening the border the key to investment funds?
Australia could potentially support its start-up businesses by letting in 40-50 wealthier foreigners under the significant investor visa program, according to an industry expert. ...Read more
What to expect as the end of lockdown looms? Will the Stage 2 tax cuts boost your tax return? Where should investors be looking as the economy reopens?
Listen now
Could property prices inflate by another 20%? What’s happening in recent dividend announcements? Did your fund fail the YFYS test?
Listen now
What does the NSW regional permit mean for property investors? Who really wins from the BHP-Woodside merger?
Listen now
The sea and tree-change norm; Square’s acquisition of Afterpay; Why you should think twice before turning to TikTok for advice
Listen now
Mutual funds
Sold your stocks during the dip last year? Here’s how much it might have cost you
If you cashed out during last year’s COVID-19 crash, here’s how much it might have cost you. ...Read more
Mutual funds
‘True to label’ warning again given to fund managers: ASIC
Consumers should be wary: Fund managers aren’t doing enough to ensure products are “true to label”, with a number of product names not aligning with underlying assets in those funds. ...Read more
Mutual funds
Move over, mainstream: ESG excels
Responsible investing is proving its worth in the investment game, beating out the total return of the S&P/ASX 300 over the last decade. ...Read more
Mutual funds
ASIC makes frozen funds easier to access
A new relief measure will enable investors suffering hardship to access their investment money even where managed funds have been “frozen” to maintain fund stability through the COVID-19 pandemic....Read more
Mutual funds
Is it time to put a food-style label on investment products?
Much like the food people eat, investors are being told they need to know what they are buying before purchasing exchange-traded products, as many are unaware of the ramifications if they don’t. ...Read more
Mutual funds
Is a model portfolio the way to go during a downturn?
The use of model portfolios – a type of managed account – can provide investors with a range of benefits during a downturn such as the COVID-19 crisis, an investment expert has touted. ...Read more
Mutual funds
Retail drag on REITs not all doom and gloom
In the world of REITs, COVID-19 is a human and economic crisis but not another GFC, according to an investment group. ...Read more
Mutual funds
Is opening the border the key to investment funds?
Australia could potentially support its start-up businesses by letting in 40-50 wealthier foreigners under the significant investor visa program, according to an industry expert. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
