Responsible Investing and Stock Allocation

Wednesday 13 January 2021

Research / Market

We analyze the portfolio choices of approximately 913,000 active participants in employee saving plans in France. Looking at the cross-section of equity exposure, we find that the inclusion of responsible equity options in the menu of available funds is associated with a 2.1% higher equity allocation by plan participants. Compared to an average equity asset allocation of 12.1%, it represents a material increase (17% in relative terms). Difference-in-differences analyses confirm that the introduction of a responsible equity option to a saving plan is followed by an increase of 7.2% in participants’ appetite for stocks, contrary to what happens with conventional equity funds...

Read more

Other news

Vignette - Italy outlook
18/01/2021 Research / Market

Italy: ECB's umbrella to protect bond market, despite uncertain political situation

Political situation: On 13 January, Italia Viva – a minor coalition partner led by former Prime Minister Matteo Renzi – pulled out of the ruling coalition, leaving the government short of a majority in the Senate. However, we believe that snap elections are unlikely for now. In our view, the most likely scenarios are: Prime Minister Giuseppe Conte could seek to win a confidence vote, with support from parties both inside and outside the ruling majority and also unaffiliated lawmakers (Gruppo Misto); Conte could step down, triggering a new round of talks that could eventually lead to a new administration, headed by Conte himself or another Prime Minister, with support from the same alliance; or a caretaker administration could be appointed to manage the government until the next election.

Vignette - Blue paper - US IG for insurance
13/01/2021 Research / Market

European insurers: the case for going global in the credit allocation

In the hunt for yield, some years ago European investors started to allocate part of their credit exposure to dollar assets. However, many then put a stop to this diversification due to high hedging costs. In the context of the Covid-19 outbreak, the Fed cut rates to post-Lehman lows. Consequently, euro and dollar interest rates converged significantly, reducing hedging costs and making a case for broadening the investment universe from a European to a global base more attractive.