Michael Venuto, Co-Founder and CIO at Toroso Investments, has seen a shift in financial advisors’ perspective toward a more holistic investment management process. Venuto pointed out that popularity and conversations centered around ESG investing are accelerating among advisors and clients.
“ESG data and policies are here to stay and may become the norm for investment analysis and sere as indicators of future performance,” Venuto said.
In survey of financial advisors attending the webcast, 50% of respondents expect ESG strategies to enhance return over time, but 47% still require further education on the subject, which suggest that many are at least looking at the investment theme. About 55% of respondents also indicated that they expect to increase exposure to ESG strategies over the next 12 months while 45% expect to keep current holdings steady.
Vincent T. Lowry, Lead Portfolio Manager of OppenheimerFunds’ Revenue Weighted Strategies, laid out two two recently launched ESG ETFs – the Oppenheimer ESG Revenue ETF (NYSEArca: ESGL) and Oppenheimer Global ESG Revenue ETF (NYSEArca: ESGF) – for investors looking to target companies with sound ESG principles.
Specifically, ESGL targets broad U.S. large-caps through the S&P 500 but screens through Sustainalyics’ proprietary scoring system that focuses on those with positive ESG attributes and employs a revenue-weighted methodology.
ESGF, on the other hand, takes a global approach. The ETF tries to outperform the MSCI All Country World Index with strong ESG practices and re-weights companies based on revenue earned. MSCI ESG Research utilizes a proprietary ESG scoring system and screens companies based on Sharpe Ratio, a measure of risk-adjusted performance.
Financial advisors who are interested in learning more about ESG investments can watch the webcast here on demand.