Portfolio management and client service to our clients
In these challenging times, we maintain the view we expressed last week (please see here). Basically, the news flow from this pandemic continues to deteriorate and the extraordinary measures taken by governments are likely to create much uncertainties and volatility in the short term anyway. Whereas it remains extremely difficult to make any meaningful forecasts, it seems to be a very violent but time limited shock to the world economy. Our conviction is therefore that fundamentals will be the determining aspect of the recovery. This should be a positive for active management and reinforces the relevance of our boutique “away from the crowds” investment model.
In the incredibly volatility seen this week, we’ve seen some interesting trends and news items in sustainable investment. The pressure in the market is something of a day of reckoning for sustainable investment, as some critics might imagine that ESG credentials take second place when capital preservation becomes the priority. But so far ESG investment is showing itself to be sticky and attracting new investment from long-term investors during this volatile period. It’s a sign that ESG funds are making their way into model portfolios and long-term allocation strategies from advisors.
We would like to keep you up to date with our thinking in this period of extreme volatility and give you a quick update on our funds at QUAERO CAPITAL. In the fog of war, it is extremely hazardous to make any prediction and invariably, these tend to be highly contextual or misguided in a shock such as the one we have experienced this quarter.
We can however make a number of observations that we hope will be useful to our clients.
As we talk about the fossil fuel industry, there is a noteworthy disparity in the approach between the top six European producers and other global players when it comes to climate change. European firms have pledged to significantly reduce their carbon footprints alongside investing into innovative low-carbon technologies. These strategies are a response to the new European Green Deal. Conversely, American oil and gas companies as well as Russian, Chinese and Saudi nationalised companies seem not to take the same path.
The spotlight in recent weeks has shifted back upon the palm oil industry. The negative connotations associated with the sector have continued to deepen, but there is a growing number of producers who offer a differentiated product, one made with a focus on sustainability. Worldwide, demand for the commodity has continued to rise which brings nations and climate activists to a crossroad, wondering whether sustainable palm oil can be produced whilst fighting climate change.
A new academic study, conducted by Professor Andrew Clare of the Cass Business School, reveals a so-called “boutique premium” in the European fund industry. This means that smaller boutique asset managers offer added value in terms of performance against large competitors in certain asset classes.
The ambitious climate mission led by Ursula von der Leyen is starting to gather steam. Europe wants to be the front-runner in climate friendly industries and clean technologies. The policy package comprises of measures to tackle climate and environmental-related challenges through a resource-efficient and competitive economy. The overarching objective of this European project is to become the first carbon neutral continent by 2050 all whilst being the second largest consumer market globally. In order to attain this goal, by 2030 GHG emissions need to be cut by 50-55% of 1990 levels, the figure previously stood at 40%.
Cette chronique de Jean Keller a été publiée dans Le Temps du 3 février 2020. Lire l’article.
Alors que la BNS semble enfermée dans la notion très conservatrice selon laquelle il faudrait souffrir beaucoup pour mériter un avenir meilleur, il est grand temps que nos autorités ouvrent enfin les cordons de leur bourse. Car les projets d’investissement majeurs ne manquent pas !
The attention of business leaders and experts on the climate emergency is higher than ever. This is what emerges from the latest Global Risks Report published every year on the eve of the launch of the World Economic Forum. For the first time, the 750 business leaders and experts from all over the world ranked five environmental and climate issues as the most important risks facing the world in the coming year. In particular, it is climate inaction, extreme events and biodiversity loss that concern world decision-makers, factors that hadn’t made the list before ten years ago.