Q WHAT IN­VEST­ING TRENDS ARE WE LIKELY TO SEE IN 2019?

Money Magazine Australia - - INVESTING OUTLOOK -

Where once eth­i­cal in­vest­ing was a niche area, it’s now nearly main­stream. We ex­pect this trend to con­tinue as re­tail and whole­sale in­vestors be­gin to ques­tion the tan­gi­ble so­ci­etal im­pact of their in­vest­ments.

This is very dis­tinct from phi­lan­thropy – there’s a grow­ing body of re­search on per­for­mance val­i­dat­ing this trend. Deutsche Bank eval­u­ated 56 aca­demic stud­ies analysing com­pa­nies with high rat­ings for en­vi­ron­men­tal, so­cial and gov­er­nance (ESG).

It found 89% of the stud­ies showed that com­pa­nies with high ESG rat­ings fi­nan­cially out­per­form the mar­ket in the medium and long term.

A few sec­tors are well in line to cap­i­talise on this trend, in­clud­ing credit unions and re­new­able en­ergy de­vel­op­ers. But we see it soon im­pact­ing all in­vest­ment and com­pa­nies seek­ing funds.

If you are new to eth­i­cal in­vest­ing, a good start­ing point would be the Eth­i­cal Ad­vis­ers’ Co-op, which is a mem­ber group of Aus­tralia’s most trusted eth­i­cal ad­vis­ers.

Will Richard­son, MD at Gi­ant Leap Fund; part of The New In­vestors on Ya­hoo Fi­nance

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