Market Insights

Incorporating environmental, social and governance (ESG) factors into investment analysis can identify risks and opportunities in the market. But investors desiring to improve the world around them must go a step further. Engaging with companies to address ESG issues plays an important role in creating a sustainable future.

This year, we’ve been impressed by progress on the engagement front, as key shareholder initiatives driven by Dana and other investors will force transparency at one of the world’s largest energy firms: Exxon Mobil. This blog looks at that engagement effort, and its implications.

Environmental, Social and Governance investing has grown considerably in the past five years, but there’s more than one inroad leading clients to the space. Is it a desire to improve the environment? A chance to address social justice issues? Or does your client see ESG primarily as a pathway to potentially better returns and less risk?

Should I take money off the table? It’s a natural question every time stocks hit a valley or peak.

But timing markets often lead to bad results. Stepping to the sidelines when stocks plumb new lows often means missing the rebound. And moving to cash to preserve gains when stocks hit new records can mean missing out when markets had more room to run.

During a career that has spanned more than 20 years at Dana Investments, portfolio manager Duane Roberts has seen management teams’ attitudes toward ESG (Environmental, Social, Governance) issues change considerably. In a brief interview, he reflected on how the tenor of management teams has changed, particularly in recent years. Excerpts from that interview follow:

In a competitive investment management environment, every asset manager must seek differentiated ways to add value for clients.

At Dana, we take several steps within the idea generation, portfolio construction and risk management process that we believe distinguishes our strategies. This excerpt from a Q&A with our portfolio managers shares how we arrive at different investment ideas:

While the U.S. economy continues to rebound, the Delta variant remains a wildcard to growth potential in the coming quarters. With the virus on everyone’s minds, we wanted to provide you a front row seat to what management teams are saying about the variant, and how it is affecting their business or the broader economy.

With more than $50 billion flowing into ESG strategies in 2020, and more than 350 different sustainable funds available to investors, the space remains a hot conversation topic among advisors and their clients.

Not surprisingly, our own ESG strategy, the Epiphany Fund, is one of the funds we are asked about most. This blog takes a short look at a couple questions we are asked most frequently, and our explanation for each:

Disruption and innovation are the very fabric of the American economy. So it’s little wonder that investors get excited about disruptive trends.

But once in a while, it’s worth taking a pause to put current disruption and innovation in perspective. Not only because the statistics can be eye popping, but because they help investors see the bigger picture, and take a long term view with stocks.

With that in mind, we offer a few short, simple statistics that put a few recent innovative and disruptive trends in perspective. The innovations are well known, but the statistics offer perspective on how far the trends have come, and how far they can still push forward.

Investment managers are always looking for an information edge in the stocks and companies they follow. Dana is not alone in this regard. But when it comes to garnering unique insights, we believe the world has never been more awash with opportunity. The reason: Technology, data and information are more readily available.

At Dana, we’ve always utilized what we believe is a distinct blend of quantitative screening and qualitative analysis to isolate investment opportunities. But here’s a look inside at some – but not all – of the new ways we are gathering information.

Editor’s note: Our consumer discretionary sector outlook is part of a regular series sharing our views on various sectors. It’s part of our efforts to increase communication with investors at a time of economic and market uncertainty. While the sector outlooks provide a short overview of our thinking, we invite you to contact us if you are interested in a deeper discussion.

The S&P 500 consumer discretionary sector hit several all-time highs in recent weeks, and higher valuations are likely warranted. Consider the backdrop: Consumers amassed $4 trillion in savings during the pandemic, household balance sheets are generally strong, the employment picture is starting to improve, stimulus checks are arriving in bank accounts, and credit is readily available. In short, spending should spring forward as COVID restrictions ease.

But valuations reflect many of these positives. This blog looks at some of the bright spots and remaining opportunities Dana sees within the sector, along with a few small pockets that warrant caution.