Global Investing

More than a “nice to have,” investor sentiment is running heavily on the side of environment, social and governance (ESG) factors, according to the latest Thomson Reuters Perception Snapshot.

Feedback from 25 global buy-side investors found that 84 percent evaluate ESG criteria to some degree when making an investment decision.

The remaining 16 percent say ESG issues are not considered until a company’s ability to generate high returns is hindered by these factors.

Some of the selected comments:

“ESG only plays a role to the extent that it is an overhang on the stock. There is no moral component to investing. We are value neutral when it comes to our investment decisions, but we are not value neutral in our lives. We have a fiduciary duty to our clients, to the people who give us money to manage to maximize returns, which means that we can not be limited by our own personal morality. If I see a cigarette company that looks interesting I may invest in it even though I might not like it
personally.” – U.S. Hedge Fund Investor

“I am convinced that companies that follow the philosophy of social and economic responsibility are performing better in the long-term than those that do not.” – European Core Growth Investor

This chart shows losses in the Standard & Poor’s 500 index since October 2007. Joseph Brusuelas, a director at Moody’s Economy.com, said from the 2007 peak to the first quarter of 2009, U.S. stock holdings fell $7.6 trillion in real terms. “Our estimate suggests that through the end of March, U.S. stock wealth will have fallen by $66,000 per household,” he said.

- Emily Kaiser

Stock markets have fallen so far that they now offer brave, long-term investors a ‘once in a generation’ opportunity, according to LV Asset Management’s Tom Caddick.

While there is little sign of the bad news letting up, stock markets tend to look forward, rather than backwards, and will anticipate a recovery before it happens.

He’s backing up his brave talk by investing his own money in his funds.

However, he warns that while it could feel great in the long-term, don’t expect markets to rise immediately.