Displaying items by tag: esg

Diversity, Equity and Inclusion approaches are key parts of finding new financial advisor talent in today's world. Comments at the CFP Board by Akeiva Ellis stressed that firms evaluate their DEI policies and procedures, and more importantly the culture if they want to hire and retain employees. Executives at T. Rowe Price have emphasized plans for advancement within the company as a strategy to retain employees. Specific step by step paths that allow them to know their metrics and execute are the best way to retain and attract talent. Finally, underserved groups don’t often have the same access to the personal feedback that allows them to flourish so specific habits surrounding performance are critical for keeping diverse talent.

FINSUM: DEI is becoming a critical part of recruitment and retention, and an edge up could provide the strongest advisors in the market. 

The environmental, social, and governance investment trend continues on a full head of steam as Goldman Sachs and BNY Mellon both launched a series of new ETFs aligning with different ESG objectives. Goldman launches a Large Cap equity ETF which tracks companies aligned with the new Paris Climate Agreement. Meanwhile BNY Mellon drops three new active ESG ETFs: the first will invest in over 80% sustainable U.S. equity, the second geared towards global markets, and the final will target emerging markets. These are just the latest as both Ark and JPMorgan created two new ESG ETFs as well in the last week. Some of the newer ETFs are following in the Euro area trend of specific disinvestment from companies reliant on C02.

FINSUM: The best part of all the new ESG focused products is the way they can be added that complement an existing portfolio: lacking large cap, pick up an ESG focused large cap ETF.

Environmental, Social, and Governance standards have, up until this point, been an opt-in style strategy to give an edge in debt and equity markets, but that could all be changing. The CEO of Norges Bank Investment, the world's largest stock owner, says that corporate life is only going to be more difficult for firms that don’t meet ESG standards. Market pressures are going to rapidly change and firms will have a difficult time raising finances, maintaining employees, and retaining customers if they aren’t part of a green future. Norges plans to utilize its market power to apply a lot of pressure, one such way is by giving companies expectation documents. They believe companies won’t be profitable in the long run if they don’t commit to ESG.

FINSUM: This strategy of pressuring companies through divestment has been shown to not necessarily be effective in holding them accountable and transitioning them into a greener world.

With 2021 almost coming to a close it's worth looking back at the biggest ESG funds of the last year, and three have stood out in a very saturated market. Goldman’s Future Planet Equity ETF is an active fund that addresses environmental problems and has raked in $107m since its launch in mid-July. Invesco’s MSCI Sustainable Future ETF focuses on corporations utilizing natural resources more efficiently and has outperformed the previous Goldman’s Future Planet fund by 4.7% since July. Finally, the Humankind U.S. Stock ETF is an ESG focused fund that is weighted by proprietary data and varies greatly from the traditional cap-weighted ETF. HKND has raised over $106 million since its launch in February.

FINSUM: These are stand out performers in a highly saturated market, equity focused ETFs are the route to take as far as ESGs.

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