Eq: Total Market

(New York)

ESG is a very notable area right now that has been gathering considerable assets. Client demand for such products is high in certain demographics. That said, some reports show that ESG stocks do not perform as well as their conventional peers. With that in mind, here are some of the best ESG stocks that looked primed to do well (and most of them won’t even be recognizable as ESG). The stocks are: Home Depot (HD), PayPal (PYPL), GlaxoSmithKiline (GSK), Equinor (EQNR), Churchill Capital Corp IV (CCIV), Microsoft (MSFT), Unilever (UL).

FINSUM: We love Home Depot here. The fundamentals look good –Millennials, which are the largest generation ever in the US, are entering prime home-buying years—and Home Depot is a leader in social responsibility, with diverse hiring practices.

(New York)

BAML’s chief investment office has put out some comments on how to help position ESG for clients. The ESG sector is plagued by misinformation and vagueness which clouds the overall value proposition. Accordingly, the best way to approach it is to have a matter-of-fact conversation to demystify things. According to BAML, “Advisors find clients are generally looking to avoid certain areas depending on their preferences, or because they have found investments score poorly by ESG metrics; favor investments they think will benefit various social or environmental practices; or help contribute to measurable outcomes around such an initiative”. They continued “It's an opportunity to demystify the conversation and also to keep it in a dialogue, because where we find this goes awry is when anyone feels like there's a moral superiority or mandate going on as opposed to a dialogue around your personal preferences”.

FINSUM: It is easy to get lost in the world of things claiming to be ESG. The best way to approach the sector is to be specific (e.g. I want a portfolio without fossil fuels), or at least specifically vague (I only want to invest in companies with high ESG scores).

(New York)

The market has been blindsided this week, with big losses. However, the 13th was great news for investors, as the market finally showed some resilience, rising considerably despite some more worrying inflation data (PPI). The 1%+ gains on the 13th are a distinct sign: investors are still willing to buy the dip.

FINSUM: Investors still seem to believe in the fundamental direction of earnings and the economy. Our opinion is that this bout of inflation is temporary, but even if it isn’t, it is a good sign that investors can see beyond the inflation numbers right now.

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