It’s now been a year since COVID-19 shuttered many businesses, forced stay-at-home orders for Americans, and upended every sense of normalcy. As we cross that one-year anniversary, Dana Investment CEO Mark Mirsberger reflected on the year, what it meant for asset management businesses, and what it might mean going forward.
The financial crisis was painful for anyone working on Wall Street, but the period gets credit for improving at least one industry dynamic: The bar for effective communication from an asset manager has been significantly raised.
As markets plummeted, advisors, consultants, investment committees and other key fund decision makers demanded dialogue from their portfolio managers about the market collapse and what they planned to do going forward. The demand for increased communication continues today, and is an industry trend we applaud.
Advisors and consultants deserve shared insight from their investment managers, and an open forum for communication. In short, they deserve true partnership. We believe boutique asset managers are best positioned to deliver the partnership clients deserve.
In our last two blogs on environmental, social and governance (ESG) investing we discussed the what and how of ESG investing. In our final blog of the series we are going to explain why ESG investing is important for investors and for the future of the entire investment landscape.
The adoption of ESG investment criteria in the investment community has hit a critical mass. Today, funds employing some form of sustainable investing strategy hold 25% of a company shares1.
There are a variety of styles in which environmental, social and governance (ESG) funds are managed. As with classic fund investing, the typical ESG fund manager will consider traditional investment metrics incorporating factors such as valuation, growth, earnings and balance sheet health. In addition to these financial metrics, the manager will incorporate an array of ESG metrics into the investment process, analyzing factors that include:
Environmental: pollution, consumption and disclosure
Social: tobacco, labor practices, gambling, pornography, weapons
Governance: board independence, CEO compensation, auditing processes
Faith-based: abortion, contraception, alcohol
The October issue of Citywire RIA Magazine has hit the newsstands and they released an RIA Supplement titled, “ESG’s Time Has Come.” Environmental, social and governance (ESG) investing seems to be a hot topic recently, but many advisors are not up to date with the ins and outs of ESG investing.
As part of the supplement, Dana submitted an article answering many questions that advisors have about ESG Investing. Questions include:
- What advice would you have for advisors who are looking to get into this space or deepen their ESG Investing toolkit?
- ESG Strategies have become popular. Why is this?
- What’s your approach to ESG Investing? How does it differ from competitors?
- What funds do you offer? Are they all ESG funds?
- How do you see the future of ESG playing out? Is it going to become more mainstream and just a regular part of how people invest?
“Among us, who is above must be in service to others. This doesn’t mean we have to wash each
other’s feet every day, but we must help one another.”
What do we want to accomplish with our time here on Earth? What impact do we want to have on society? How do we want to help shape the future for the generations that follow? Mankind has asked itself these philosophical questions for ages. Their emerging importance in the form of environment, social and governance (ESG) investing or sustainable, responsible and impact (SRI) investing is a relatively more recent phenomenon.
Faith-based institutions continue to be leaders in the evolution and growth of Environmental, Social and Governance (ESG) investing. During September’s Financing The Future summit in South Africa, 22 religious group organizations announced their plans to divest oil, gas and coal investments, solidifying Faith-based investors’ position as the single largest constituency exiting fossil fuels1. While many ESG investing strategies utilize these exclusionary screening techniques to avoid investments in fossil fuels or sectors such as weapons, tobacco, alcohol and pornography, a group of Catholic faith-based investors are taking their ESG investment approach further by implementing and advocating a proactive approach to investment selection.
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.