As 2018 comes to an end, I would like to express my deepest appreciation for your support to Purview Investment by becoming an early client.
For a very long time, investors have focused on just two dimension of investments - return and risk, unaware or ignoring the environmental and social impact of their portfolios. Many of us care about the types of food we eat, not just their tastes and calories, but also their health benefit. In the world of architecture, green codes encourage sustainable design and construction. Purview Investments challenges the traditional investment thinking. It’s time to go beyond just return and risk. It’s time to take actions to “detox” investment portfolio, to reduce the carbon footprint of our investment portfolio, while achieving comparable return and risk goals. Purview Impact Solution was introduced to individual and institutional clients nearly a year ago, with this purpose in mind. I’m very pleased to share with you that Purview has demonstrated that yes, you can drastically reduce your investment’s carbon footprint to nearly half that of the benchmark, and still matching or outperforming the benchmark.
This morning, New York Times published an article “The Story of 2018 was a Climate Change”. It reminded us that the problems caused by global climate changes are escalating. Five of the hottest years all happened after 2010. Extreme weather conditions led to more intensity of wild fires, flooding, tidal surges, destroying lives and business. Environmental risk is clearly a human risk, community risk, government tax-base risk, economic risk and business risk. It’s also a generational risk. It’s good to know that most governments in the world, some US states, NGOs and companies are taking initiatives to combat climate change. To name just a few,
· In May, European Commission published a press release, requiring asset management firms to take active roles in combating climate change. The commission specifically called for creating low-carbon version of all market indices.
· In China, there have been strong technological and regulatory pushes toward a greener society, with many cities running on electric buses, cities connected with efficient high-speed rail, and fossil fuel car sales are stalling.
· Royal Dutch Shell company recently introduced carbon emission targets, linking executive pays to meeting the targets.
· More US fund companies launched Environmental Social Governance ETFs this year, pushing the number of ESG ETFs listed in the U.S. to over 70.
While the U.S. regulators may lag the global trends, U.S. individual and institutional investors can make a impactful contribution to fight climate change, through cleaning up their portfolio carbon footprints. I’m very proud that Purview Investment is among the pioneers of impact investing through ETF managed portfolios. Purview is here to help you to be part of the global movement to fight for a cleaner world for us and for our future generations.
2018 is tumultuous year in capital market. After a 9-year bull market, the capital market is being tested by drastic changes in economic, financial and geopolitical environments. Fed tightening, accelerated rate rising, peak in corporate earnings, the escalation in the trade/geopolitical wars with China and the U.S. allies, and the disfunction in Washington have all contributed to tremendous volatility. Throughout 2018, we have carefully managed the market volatility by tactically de-risking our strategy, adjusting allocations of global exposures and managing interest risk. Purview will continue to manage the ever-changing market risk and seek new investment opportunities in 2019.
While the market risk cannot be fully avoided, the climate risk can be reduced. Let’s make one more New Year Resolution: Spread the message of reducing investment carbon footprint to fight climate change in 2019!
Happy New Year!
Linda Zhang, Ph.D
Founder and CIO, Purview Investments, New York City
ETF Managed Solutions Global Investing | Impact Investing