THE BASICS
How to do good and well with your investments
Investing responsibly can offer both financial opportunities and the possibility to improve the world.
Improving the world with your savings – what sounds like a new take on a ‘70s hippie slogan has become one of the core principles of modern-day investors. Responsible investment (RI) funds select companies which demonstrate the best environmental, social and governance practices. We believe that these may offer investors the best of both worlds: seeking attractive financial returns and a possibility to allocate money to causes they care about.
Incorporating moral beliefs into investment decisions is all well and good, but can investors actually generate positive returns if they solely focus on companies that live up to RI standards?
In our opinion very much so. Morningstar data reveal that 58.8% of sustainable funds that have been around for the past 10 years outperformed their average traditional peers across seven categories over a 10-year period to 2019.
Success rate of sustainable funds by Morningstar category (%)
| Category | 1-year | 2-year | 3-year | 4-year |
|---|---|---|---|---|
| Global Large-Cap Blend Equity |
75.1 |
73.7 |
76.9 |
67.3 |
| Global Large-Cap Growth Equity |
60.3 |
43.2 |
37.5 |
56.7 |
| Global Emerging Markets Equity |
41.3 |
60.0 |
58.5 |
50.0 |
| US Large-Cap Blend Equity |
76.4 |
71.4 |
76.9 |
81.3 |
| Europe Large-Cap Blend Equity |
71.1 |
75.0 |
67.2 |
55.1 |
| Eurozone Large-Cap Equity |
63.5 |
63.0 |
60.6 |
62.3 |
| EUR Corporate Bond |
58.0 |
58.5 |
62.2 |
33.3 |
All Categories |
65.5 |
65.6 |
64.4 |
58.8 |
Source: Morningstar Research, Data as at 31 December 2019
It is true that investing through a sustainable lens narrows down the realm of possible investment options. But just as one door closes, another one opens. In fact, the RI investment universe comes with a whole new range of opportunities that many investors were not even aware of before.
There’s something in RI for everyone
RI is not about what you cannot do but about what you can do. We believe that the RI space can offer such a variety of possibilities that anyone interested in dipping their toes into the wide waters of responsible investing will find something that suits their taste.
According to Jean-Jacques Barbéris, Member of the Executive Committee and Head of the Institutional and Corporate Clients Division & ESG, it is important to be realistic when diving into this world: ‘We need to be humble and modest. While meeting the climate change challenge is primarily the responsibility of elected public authorities, all actors, including financial players and end-investors, have a role to play. The question is, how can we, as savers and investors, help finance sustainable economies?’
While meeting the climate change challenge is primarily the responsibility of elected public authorities, clearly all actors, including financial players and end-investors, have a role to play. The question is, how can we, as savers and investors, help finance sustainable economies?
JEAN-JACQUES BARBÉRIS,
Member of Executive Committee and Head of Institutional & Corporate Clients Division & ESG.
Barbéris says those who are willing to contribute to the fight against climate change have two main options: ‘The first is there are investment solutions such as green bonds. These debt instruments help finance projects that propel the energy transition.’
‘The second thing you can do as an investor is measure the impact your investment has on the climate. At Amundi, for example, we offer decarbonised portfolios,’ Barbéris says.
Decarbonised portfolios include companies that aim to emit as little CO2 as possible. Their company selection process aims to reduce the exposure to carbon intensive businesses across various sectors.
The realm of responsible investing can be complex at first sight, but asset managers such as Amundi are there every step of the way. The firm’s goal consists of making the entire investment process as uncomplicated and comprehensible as possible.
IMPORTANT INFORMATION
This document contains information about responsible investing funds.
This material is for information purposes only, is not a recommendation, financial analysis or advice, and does not constitute a solicitation, invitation or offer to purchase or sell the Fund in any jurisdiction where such offer, solicitation or invitation would be unlawful. This information is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities or services in the United States or in any of its territories or possessions subject to its jurisdiction to or for the benefit of any U.S. Person (as defined in the prospectus of the Funds). The Funds have not been registered in the United States under the Investment Company Act of 1940 and units of the Funds are not registered in the United States under the Securities Act of 1933. Accordingly, this material is for distribution or to be used solely in jurisdictions where it is permitted and to persons who may receive it without breaching applicable legal or regulatory requirements, or that would require the registration of Amundi or its affiliates in these countries.
Investment involves risk. Past performance is not a guarantee or indication of future results. Investment return and the principal value of an investment in the Fund may go up or down and may result in the loss of the amount originally invested. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability. It is the responsibility of investors to read the legal documents in force in particular the current prospectus of the Fund. Subscriptions in the Fund will only be accepted on the basis of their latest prospectus and/or the Key Investor Information Document (“KIID” available in local language in EU countries of registration) which together with the latest annual and semi-annual reports may be obtained, free of charge, at the registered office of the management company of the Fund, or at www.amundi.lu.
Please note that the management company of any fund may de-notify arrangements made for marketing as regards units or shares of the Fund in a Member State of the EU in respect of which it has made a notification. In such a case and according to applicable laws, regulations and provisions contained in the prospectus of the Fund, investors may be able to repurchase or redeem, as the case may be, free of charge or deduction, the units or shares of the Fund concerned.
The information in this document is as at 31 August 2020 except where otherwise stated. This material is based on sources that Amundi considers to be reliable at the time of publication. Data, opinions and analysis may be changed without notice. Amundi accepts no liability whatsoever, whether direct or indirect, that may arise from the use of information contained in this material. Amundi can in no way be held responsible for any decision or investment made on the basis of information contained in this material.
The information contained shall not be copied, reproduced, modified, translated or distributed without the prior written approval of Amundi.
Date of publication: 22 September 2020
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Amundi Asset Management
A French simplified joint stock company (société par actions simplifiée), a portfolio management company approved by the “Autorité des marchés financiers” or “AMF” under the number GP 04000036 whose registered office is located 90 boulevard Pasteur, 75015 Paris – France –, under the Paris trade register number 437 574 452 RCS.
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