Eq: Tech
(New York)
For years robotics was pigeonholed into major US manufacturing duties but new technology and artificial intelligence are turning that around…see the full story on our partner Magnifi’s site
(New York)
The Pandemic has shifted the paradigm for many investors as they look to environmental, social, and governance (ESG) to make up…read the full story on our partner Magnifi’s site
(New York)
Any advisor reading ESG headlines over the last year will have seen some big numbers coming out of the sector (e.g. ESG sees $x trillion of asset flows). One such headline recently was “one third of U.S.-domiciled, professionally managed assets addressed ESG considerations as of the end of 2019”. The report, from US SIF Foundation, claimed that $17.1 tn was parked in sustainable investing strategies. However, this can be highly misleading. The reason why is the criteria for what can be considered “ESG” is quite broad. While the US SIF report did have some rigor in defining ESG, the way it conducted its study meant that any managers taking into account any number of considerations that could theoretically be considered related to ESG, were called “ESG” assets.
FINSUM: ESG is growing nicely, but there does seem to be a lot of “fudge” in the asset reporting. Part of this likely comes down to what we might call “de facto” ESG. In other words, a lot of ESG funds are dominated by tech stocks/assets. Many of these inflows have little to do with ESG imperatives (they are more pure return-driven), but can nonetheless be referred to as “ESG” since they are technically environmentally-friendly.
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Advisors are a pretty conservative lot. So, while many might have heard of the DEMZ fund—the Democratic Large-cap Core Fund—they might not have given it serious thought. To start with, the fund is unlike other “political” funds (such as MAGA) because at its heart is world class fund construction and management. Merely stripping out stocks from an S&P 500 basket, like others do, will diminish returns almost by definition, so DEMZ accounts for this by creating strict parameters for weighting and caps that allow it to remain significantly diversified. And it achieves all this while remaining meaningfully cheaper than other funds in its category.
But the real reason advisors need to pay attention to DEMZ is that the future of their business might depend on it. DEMZ invests in companies that give 75% or more of their political donations to the Democratic party, and it just so happens that a lot of your big clients’ heirs have the same political leanings. Most advisors are aware that there is a high attrition rate when a head of family passes away and wealth is transferred to spouses (usually wives) and children. A big part of this is that the advisor does not seem like they can align with the inheritors’ goals and needs. In this way, DEMZ can help advisors signal to spouses and heirs that they understand their political affiliations and moral positions, and how those are fused with their investment goals. Therefore, even if you are card-carrying Republican, DEMZ is something that needs to be on your radar.
If you don’t take a look and understand DEMZ, do so at your own peril.
n.b. This content was composed and paid-for by Reflection Asset Management and is not FINSUM editorial.
(New York)
A new ETF tapping into dual online crazes has been filed for the First Trust S-Network Streaming and Gaming ETF…see the full story on our partner Magnifi’s site
(Silicon Valley)
Crypto and other Fintechs have blown up in mainstream popularity in the last couple of years, but Mark Cuban sees another…see the full story on our partner Magnifi’s site