Environmental, social and governance (ESG) factors are increasingly used alongside traditional financial metrics to gain a better understanding of the risks linked to the sustainability of any investment. There are many ways in which these factors can be incorporated into an investment process, depending on how investors want to align their financial objectives with their values. A notable development we’ve seen most recently is an evolution from investors simply focusing on mitigating ESG risks and employing exclusionary frameworks, to also considering the potential opportunities ESG investing can offer and aligning portfolios accordingly.
Replacing internal combustion engines with electric vehicles is vital if the world is to hit emissions reduction targets. The transition to battery-powered electric cars has dominated the headlines in recent years, but attractive sustainable transport investment opportunities can also be found among the battery makers, semiconductor manufacturers, charging station operators, component suppliers – and many others besides – that are helping to make the electric vehicle revolution possible.
A summary of the factors driving markets over the last month, covering the global economy as well as major asset classes, complete with Guide slides.
While the economic case for investing in the Chinese stock market is straightforward, when it comes to China and sustainability, the arguments are more complex. Howard Wang, Head of Greater China Equities, looks at the considerations for investors when investing sustainably in China, with a focus on the opportunities, as well as the risks, from an ESG standpoint.
Our Mid-Year Investment Outlook explores the current risk of recession, lessons from 1970s stagflation and why margins matter most for corporate earnings. We also look at the value in value stocks, current drivers in the fixed income market and the long-term potential of China. Our latest insights can help you set your course to navigate today’s volatile markets.
China does not stack up well on most ESG metrics. Explore our take on whether investing in China can be reconciled with investing sustainably.
Biodiversity—the world’s varied wildlife, plants and habitats—is bound up with the viability of human life, especially food production. Limiting future C02 emissions will be paramount, as climate change is set to become the top threat to biodiversity—and investors have an important role to play. Those companies working to improve biodiversity may present new investing opportunities.
The latest Portfolio Insights from our Emerging Markets and Asia Pacific Equities team takes on a wide range of topics impacting the region, including global rate hikes, China’s Covid and economic policies, and rising commodity prices.
Sustainable investing continues to gain momentum and the case for considering ESG factors remains as strong as ever. Revisit the key themes supporting ESG investing using our 7 Essentials infographic.
Value has outperformed Growth since late 2020. However, this recent outperformance is a drop in the ocean compared to the huge underperformance of Value investing since 2007 and in the context of Value’s strong long-term returns. J.P. Morgan Asset Management’s new article explains why they believe Value’s potential for future returns remains great. Valuation spreads between Value and Growth are still extreme and flows back into Value strategies could provide a significant tailwind. Value also tends to outperform when inflation and interest rates are rising, and recently, earnings for Value stocks have surprised to the upside, while many Growth stocks have disappointed on expectations.
Social issues, if left unaddressed, can have a detrimental impact on investment returns. Yet social factors are less well known to many sustainable investors compared to environmental and governance factors. Head of EMEA Funds, Massimo Greco spoke to Global Head of Sustainable Investing, Jennifer Wu and Investment Stewardship Specialist, Minal Dave, to find out why investors are now paying more attention to the “S” in ESG.
Sustainability is now a key consideration when it comes to assessing financial performance and investment risk. Attractive environmental, social and governance (ESG) opportunities are emerging across all asset classes. Our chief investment officers for equities and fixed income, and our global head of alternatives, share their latest thoughts on how sustainability is shaping global markets.
Taking a patient, long-term approach to investing can help investors overcome the short-term volatility that is normal in markets. In this article, J.P. Morgan Asset Management explain their latest research into long-term investing.
|
The clean tech transition to renewable energy and electric vehicles will generate an enormous increase in demand for critical commodities. Tilmann Galler, Global Market Strategist, explores how this new commodity supercycle could underpin a secular shift in the global economy and an equally seismic rotation in equity markets from growth towards value companies. |
Investor demand for sustainable investment funds that incorporate environmental, social and governance (ESG) factors is expected to grow sharply once again this year. Here are five reasons why we believe ESG investing is much more than a short-term fad.
In the first two parts of this series we outlined how continued supply problems and tight labour markets point to lingering inflation in the developed world. To be clear, we do not expect inflation to continue heading north. Headline inflation may have peaked – or will do so over the spring – and from there, base effects from higher energy prices will allow inflation to moderate. But we do believe the pandemic has dislodged us from the stubbornly low inflation that characterised the last cycle.
In the second of this inflation mini-series we take a closer look at what is going on in the developed world’s labour markets. The supply chain problems discussed in part 1 may linger for some months but whether this turns into a lasting inflation problem depends on the jobs market. If workers are able to bargain for higher wages in the face of rising living costs then this has the potential to feed a wage-price spiral and medium-term inflationary pressure.