Barron's - USA (2020-10-12)

(Antfer) #1

October 12, 2020 BARRON’S M7


PAID ADVERTISEMENT


Completely Switch Your Investments to SI


The Barron’s news department was not involved in the creation of this content.


The value of investments may fall as well as rise and you may not get back the amount originally invested. Past performance is not a reliable indicator offuture results. For indicative purposes only.


ESG/Sustainable Investing Considerations: Sustainable investing strategies aim to consider and in some instances integrate the analysis of environmental, social and governance (ESG) factors into the investment process and


portfolio. Strategies across geographies and styles approach ESG analysis and incorporate the findings in a variety of ways. Incorporating ESG factors or Sustainable Investing considerations may inhibit the portfolio manager’s


ability to participate in certain investment opportunities that otherwise would be consistent with its investment objective and other principal investment strategies.The returns on a portfolio consisting primarily of ESG or


sustainable investments may be lower or higher than a portfolio where such factors are not considered by the portfolio manager. Because sustainability criteria can exclude some investments, investors may not be able to take


advantage of the same opportunities or market trends as investors that do not use such criteria. Companies may not necessarily meet high performance standards on all aspects of ESG or sustainable investing issues; there is


also no guarantee that any company will meet expectations in connection with corporate responsibility, sustainability, and/or impact performance.


This material is for informational and educational purposes only and should not be relied upon as investment advice or the basis for making any investment decisions.


The Trust,Wall Street Journal, Barron’s Group and UBS Financial Services Inc. are not affiliated.


As a firm providing wealth management services to clients, UBS Financial Services Inc. offers investment advisory services in its capacity as an SEC-registered investment adviser and brokerage services in its capacity as an


SEC-registered broker-dealer. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that clients


understand the ways in which we conduct business, that they carefully read the agreements and disclosures that we provide to them about the products or services we offer.A small number of our financial advisors are not


permitted to offer advisory services to you, and can only work with you directly as UBS broker-dealer representatives.Your financial advisor will let you know if this is the case and, if you desire advisory services, will be happy


to refer you to another financial advisor who can help you. Our agreements and disclosures will inform you about whether we and our financial advisors are acting in our capacity as an investment adviser or broker-dealer. For


more information, please review the PDF document at ubs.com/relationshipsummary.


UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA/SIPC.The views and opinions expressed may not be those of UBS Financial Services Inc. UBS Financial Services Inc. does not verify and does not guarantee


the accuracy or completeness of the information presented.


© UBS 2020.All rights reserved.


Inequities,forexample,investorscanuse


data-driven approaches to identify best-in-


class environmental, social and governance


(ESG) leaders across sectors and geographies,


ortheycanchoosecompaniesthatactively


address ESG-related improvements within their


business models and operations. Green bonds


have emerged as a frontier strategy in fixed income,


where investors fund environmental projects within


mainstream companies. Debt from multilateral


financial institutions like the World Bank provides


government bond-like risk/return while financing


impactful projects in emerging markets. Investing in


SI-aligned structured products takes advantage of


short-term market opportunities, while investing in


privatecompanieswithimpactfocus(forexample,


via private equity funds) aims at creating long-term


impact and financial returns.


Sustainability matters


Prudent investors consider all the factors that


couldaffectthefutureprospectsoftheiroverall


portfolio as well as each of the underlying


investments. For too long, ESG issues were


considered non-financial in nature. Many


investorsnowacknowledgethatthesefactors


canbematerialandhighlyrelevanttoinvestment


analysis.


“Forward-looking investors recognize that


riskslikeclimatechangecanimpactportfolios,


whileissueslikeemployeehealthandsafetyor


workforcemanagementcanaffectcorporate


financialperformance,”saysAndrewLee,Global


Head of Sustainable and Impact Investing, UBS


Global Wealth Management.


The broader trends


Part of the momentum is propelled by broader trends.


Consumers increasingly demand sustainable products


and services. New regulations create potential


opportunities for companies in certain sectors,


such as the European Green Deal. Finally, corporate


performance on issues such as pollution or employee


treatment can impact profitability and financial


performance; incorporating assessment of these ESG


factors is key to thorough risk/return analysis.


Sustainable investing has expanded beyond


equities to fixed income, including green bonds


and bonds from multilateral development banks,


and alternatives such as private equity, private


credit and real estate. Investors also can choose


thematic investing, which focuses on topics like


health care access or waste management.


Awareness is growing


Meanwhile, the Covid-19 pandemic has accelerated


awareness of ESG factors’ relevance for investors.


From potential root causes to economic and


financial implications of the health crisis, the


linkages are increasingly clear.


“Our clients continue to increase their sustainable


investment exposures, in many cases doing so across


their entire portfolios” in reaction to Covid-19,


Mr. Lee says. “This is a continuation of the strong


momentum we have seen in recent years.”


Go all-in today: http://www.wsj.com/ubs


Two things are key to investing


successfully for the long term: relevant


information and diversification.


Sustainable investing makes the most


of both. In fact, investors can construct


fully diversified portfolios entirely from


sustainable investing exposures.

Free download pdf