FINSUM
ESG Not Much of a Factor for Asset Owners
According to a global two-phase survey from Morningstar Indexes and Sustainalytics, asset owners are not, by and large, implementing ESG factors in their portfolios. The Voice of the Asset Owner survey asked 500 global asset owners in 11 countries their thoughts on ESG. Survey findings revealed that only 29% of asset owners reported that they consider ESG factors for at least half their holdings. The reason for the low figure was attributed to concern over the impact on returns, a lack of available products, and the reluctance of both clients and stakeholders. However, the survey also showed that 85% of asset owners believe ESG factors are material to investment policy, while 70% said that ESG factors have become more material over the past five years. Asset owners that participated in the survey included OCIOs, family offices and sovereign wealth funds, pension funds, and insurance providers. Two-thirds of the respondents noted that the quality of ESG data, indexes, ratings, and tools have improved. However, about half stated that data and ratings would stand to benefit from improvements in accuracy, timeliness, and greater objectivity.
Finsum: A recent survey revealed that while many asset owners believe ESG factors are material to investment policy, only 29% consider ESG factors for at least half their holdings.
Investors Shifting Fixed Income Strategies
Many investors are now adding private credit investments to their portfolios according to a global survey of institutional investors conducted by State Street Global Advisors. The survey report, The Future of Fixed Income, asked institutional investors how they view the fixed income market and how they’re allocating their investments amid the current market volatility. The findings were based on answers from 700 pension funds, endowments, foundations, and sovereign wealth funds, as well as wealth and asset managers. The results also found that investors have become more open to systematic fixed income strategies to help them fight the impact of rising prices and inflation. In addition, 51% of survey respondents stated their interest in increasing allocations to bank loans and 42% want to increase their allocation to inflation-linked bonds over the next 12 months. The findings also showed that investors are embracing index-tracking investments to gain efficient access to attractive sectors due to fee pressure and increased transparency. Over one-third of the respondents said that more than 20% of their fixed income portfolio is allocated to index strategies. The figure rises to 57% for investors with AUM over $10 billion.
Finsum: A survey conducted by SSGA noted that institutional investors are shifting their fixed income allocations amid the current market environment.
ESG related investment strategies encounter some turbulence
With, oh, say, Gilligan’s Island in its crosshairs, it hasn’t exactly been smooth sailing for proponents of investment strategies associated with environmental, social and governance data, according to law.com.
In fact, reems have been put to the old laptop revolving how Russia’s invasion of Ukraine culminated in geopolitical questions related to why Russia received ESG focused funds to begin with. Then what happened? Markets scram south and, in the process, a plethora of large ESG funds got hammered because, stemming from their massive holdings in tech stocks that took a beating, they registered losses worse than those absorbed by benchmarks.
McKinsey & Co. consultants, in a new paper, “Does ESG Really Matter—and Why,” go through a plethora of reasons ESG, of late, drew heavy duty criticism. At the end of day, the current turbulence surrounding its specific components aside. they concluded the underpinnings of ESGs and the adherence of “social licenser to them, way down the road, still will be integral to companies.
Meantime, mark the calendar, because a comeback’s on the docket. The Electronic Sports and Gaming Summit – or ESGs 2022 – recently proclaimed that, in the upcoming event, Riot Games will be a Platinum Exhibitor, according to ungeek.ph.
The event will take place Oct. 28-30 at the SMX Convention Center at the Mall of Asia complex in Pasay City.
Riot Games, of course, is world renowned for delivering gamers the largest, most played esports titles. Eventually, it spawned a gaggle of related media.
Muscle of exchange traded funds
Exchange traded funds are packing a considerable wallop in the construction of portfolios, according to a global survey on institutional investors on the fixed income market, reported pioonline.com.
They’re strutting an "expanded role in portfolio construction," as reflected by a recently released by survey sponsor State Street Global Advisors, survey sponsor.
Participating in the survey were 700 global institutional investors who oversee asset allocation decisions at pensions funds, wealth managers, asset managers, endowments, foundations and sovereign wealth funds. Administered by an independent firm unaffiliated with SSGA, the survey took place in the middle of the year.
"Our 2022 survey shows that the role of ETFs in asset allocation is expanding to non-core sectors," said the report, "The Role of ETFs in a New Fixed Income Landscape. We can see the increase in use, as compared to our 2021 fixed income survey."
Meantime, in August, etf.com reported on the apparent hyper popularity of longer duration US Treasuries and investment grade corporate debt ETS among investors in Europe. That has come in the face of lingering doubt over escalating inflation and the reaction by the Fed.
Bloomberg Intelligence data was revealing: it showed fixed income yields attracted more than $4.2bn over the past three months as of the time of reporting.
Skilled active managers can show what they’ve got
Skilled active management? The cocktail of ballooning inflation, interest rates and dispersion across fixed income sectors basically is giving managers the proverbial chance to strut their stuff, according to -wellington.com.
That’s why now might be an idyllic chance for investors to put their portfolios in a space to opportunistically position their portfolios.
Their individual fixed income markets have priced in the gulf in threats of recession and inflation in the euro area opposed to the U.S, the site continued. Dating back to the dawn of the Ukrainian invasion, compared to the U.S., credit spreads in the euro area have gotten wider.
This year, investor trepidations over fixed income performance have maintained their momentum, according to wellsfargo.com. Among top questions in the minds of income investors:
- What is happening to bonds so far in 2022?
- Why continue to invest in bonds?
- Why is the Fed garnering so much attention this year?
- What should investors expect from the remaining three Fed meetings of this year?
- What does Fed quantitative tightening mean?
- What do you mean when you say, “financial conditions in the economy are tightening”?
- Should we be worried about liquidity in bond markets?
- What is the shape of the U.S. Treasury yield curve telling us?