Our ESG History: ‘The Nuns Were on to Something’

Posted by Dana Funds Investment Team on Jun 30, 2021 5:36:59 PM

With a 20-year history in ESG investing, Dana was one of the earliest entrants in the space. It all started with the request of a group of nuns. In a recent conference call on ESG investing, Dana portfolio managers shared how it all began:

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Are ESG Funds Ready for a Value Rotation?

Posted by Dana Funds Investment Team on Jun 24, 2021 4:17:31 PM

Many ESG strategies enjoyed a strong performance relative to their benchmarks in recent years. Much of it was due sector exposure. Simply put, many ESG strategies were overweighted growth-oriented technology companies, which score well in ESG ratings and analysis due to their lower carbon footprint.

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Exxon Proxy Vote Marks Inflection Point for ESG

Posted by Dana Funds Investment Team on Jun 17, 2021 4:03:50 PM

In May, an activist investment firm won three seats on Exxon Mobil’s board, marking one of the most expensive, and most closely watched, proxy fights in America. It was a big victory for a small activist investor owning only a fraction of Exxon’s total shares.

It also marked a victory for ESG investors. The activist firm, a hedge fund called Engine No. 1, relied on ESG-friendly institutional investors and ESG fund managers to secure enough votes to elect the new board members, who will encourage Exxon to pivot its business away from fossil fuels.

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ESG Strategies: You Asked, We Answered

Posted by Dana Funds Investment Team on May 21, 2021 9:34:53 AM

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:

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These Stats Capture How Fast ESG Is Taking Hold

Posted by Dana Funds Investment Team on Mar 4, 2021 4:01:08 PM

While anyone with a passing investing interest would acknowledge ESG investing is growing in popularity, a few statistics on 2020 fund flows show how far — and how fast — the trend is moving.

Consider the following five stats, which come courtesy of Morningstar1:

  • S. flows into sustainable open-end funds and ETFs totaled $51.1 billion, more than double the flows of 2019 and almost 10 times as much as 2018.
  • Much of that growth came in the fourth quarter, when flows totaled $20.5 billion. That doubled the previous record for any given quarter.
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Looking to Invest Toward a Cyclical Rebound? It’s Nuanced

Posted by Dana Funds Investment Team on Feb 18, 2021 5:06:11 PM

With coronavirus vaccinations on the rise and cases trending down, it’s natural to think about what a cyclical rebound will look like, and which stocks will benefit. But investing in this cyclical bounce will be more complicated than previous recoveries, in large part because it will play out at different times and speeds across each industry and sector.

At Dana we take a long-term perspective with our holdings, and don’t position portfolios with a single overarching macro view. That said, we are nevertheless mindful of what a recovery will mean for different stocks and invest opportunistically when attractive valuation opportunities present themselves.

Below is an overview of how we are investing in companies we believe are well positioned as things turnaround:

Opportunities Began Last March

When stocks first sold off due to the pandemic, energy companies were hit with a double whammy, as an oil price war between Russia and Saudi Arabia erupted, just as global demand was poised to slow. With valuations depressed, we saw that as an opportunity, and selectively added a couple of exploration and production companies that we felt had stable balance sheets and could weather a downturn in prices. Those stocks have appreciated significantly with a bounce in oil prices.

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A Fair Question for ESG Managers

Posted by Dana Funds Investment Team on Feb 11, 2021 4:16:12 PM

With billions pouring into ESG strategies, asset managers are suddenly (and unsurprisingly) on board. Everyone has an ESG strategy, or purports to incorporate ESG factors into their analysis of a company.

This can make it tough for anyone conducting due diligence on ESG strategies to decipher which ones are truly rooted in ESG principles, and which asset managers truly believe it can affect a stock’s performance. Here’s a fair question to ask managers to see where their conviction lies: How did you decide that ESG is important to analyzing a company.

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Key Implications and Takeaways from the GameStop Phenomenon

Posted by Dana Funds Investment Team on Feb 2, 2021 10:49:57 AM

The retail trading phenomenon driving up shares of GameStop, AMC and a few other stocks has become one of the biggest investment stories in recent memory, in large part because a battle between Wall Street hedge funds and Main Street investors makes for a compelling story. But when the momentum fizzles out, we believe there are both ramifications and lessons to learn from the event.

In an interview Friday, Dana portfolio managers Michael Honkamp and David Weinstein shared their perspectives on some of the things the financial community should take away from what’s happened.

Q: Beyond the Reddit posts, what are the forces feeding this phenomenon?

Michael Honkamp: Current market conditions are ripe for all sorts of asset appreciation, and we’re seeing that in commodity prices and other pockets of the market. In short, we’re coming out of a sharp recession with many consumers in good shape, and with central banks and governments practically spraying money on the economy. If you look at the money supply growth, the slope is unlike anything we’ve ever seen. At the same time, consumers have limited spending options. The rise in retail trading of some of these stocks is just another sign of excess.

David Weinstein: I would just add that there were some industry forces that converged to help fuel the rise in these stocks. We’ve all been stuck at home, with little to do. Retail investors have become more sophisticated. You’re seeing them participate in options markets like never before. At the same time, Robinhood has been disruptive to the brokerage industry, making trading cheaper and taking it to the masses. Buying fractional shares has also allowed more people to participate in investing. These are long-term positives – we want everyone to have access to stock markets – but it can also lead to events like we saw last week.

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ESG in 2021: More Client Interest, More Strategies to Choose From

Posted by Dana Funds Investment Team on Jan 28, 2021 3:59:51 PM

ESG interest reached a tipping point in 2020, now accounting for a third of the $51.4 trillion in U.S. assets under professional management, according to the Forum for Sustainable and Responsible Investment’s 2020 trends report.

As investor interest has swelled, ESG funds may have reached a tipping point of their own. At least 20 new ESG funds have launched in each of the last six years, and by mid-year, 2020 was on pace to experience a record number of ESG fund launches.¹

Other data also points to a more competitive ESG market. Data from Sustainable Research and Analysis found that in 2010, the 10 largest ESG funds held 70.6% of all sustainably invested assets under management. A decade later, those 10 largest funds held only 38% market share.2

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Renewable Energy: Where Do We Go From Here?

Posted by Dana Funds Investment Team on Sep 10, 2020 3:14:50 PM

Renewable energy companies enjoyed considerable growth over the last decade, as the cost of solar and wind power technologies declined significantly. ”Renewables’ competitiveness with fossil fuels is strong, driven by considerable innovation, learning and economies of scale,” Lydia Miller, Portfolio Specialist at Dana Investment Advisors states in a recent Green Money Journal column. “We believe that the transition to a low-carbon economy is happening and will continue to happen. This happens over decades, with investors increasingly discounting this long-term trend.”

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The Dana Funds are distributed by Ultimus Fund Distributors, LLC. There is no affiliation between Ultimus Fund Distributors, LLC. and the firms referenced in this blog post.