The ESG inverted | Finance and Investment

Bloomberg now announces that the ESG sector is a bubble waiting to erupt, commentator Allison Schrager says that “the bubble of a vibrant economy,” contrary to her claims, does not necessarily contribute to making the world a better place. When everything went well and inflation was low, she wrote, it was easy for everyone to run the world according to their principles and virtues. Current opposite winds are making things more difficult.

It would be premature, however, to declare the death of the ESG. After all, for the current year and up to June 9, 2022, the S&P ESG index had dropped by 13.1% against -13.6% for the S&P 500. It remains only the general decline in the sector given to sellers to discover treasure hunters.

Long -term/short -term Alternative Fidelity Fund Manager, David Way has developed a certain flair to dismiss titles whose ESG claims are more ambitious than their performances. Already, at a time when the whole world had nothing but ESG virtues, he kept at the eye the fragile titles of the sector.

Every particle of the acronym ESG gives him the opportunity to find black sheep. For example, in the “E” or “Environment” aspect, it follows in the footsteps of company leaders, especially in the mining sector, who know nothing about the ESG, “but who still make promises they can’t keep, he says And many of these people snatch from one company to another and succeed in persuading detail investors who don’t have access to good information. It is a field where I am always looking for new cases. »

On the “S” side, or “Social”, it is at the risk of companies where the pressures to change accumulate, whether they come from the side of consumers, regulators or employees. “These pressures could lead to changes that are likely to hurt profits. »

In the “G” plan, or “Governance,” we find that Fidelity excels, says David Way. “A classic discovery sale in our area of ​​companies where members of the board of directors are involved in business that could reveal questions. We sold and discovered eight titles involving such administrators, and seven were dropped. »

Unfortunately, David Way is planning a good year on the stock market for 2022 and has positioned his portfolio especially on the long -term earnings side. This is so that its fund, whose uncovered positions represent 13.6% of its portfolio in the United States and 5% in Canada, saw a fall of 9% for the current year, which puts it in better position than the 13.6% decline in the S&P 500, but behind the 2.6% decline in the S & P/TSX.

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