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Monitor your ESG funds to benefit from market style shifts

ESG funds could have an unintended style bias
Monitor your ESG funds to benefit from market style shifts

Markets have been tanking: as of 13 March the MSCI World index had lost nearly 15 per cent in the year to date in sterling terms. The FTSE All-Share index, which has been exposed to the effects of the Covid-19 lockdown and a gruelling price war in the oil industry, lost nearly 30 per cent over the same period. And very few asset classes have been spared in the sell-off.

Focusing on longer-term trends in the middle of a market sell-off is not easy. Rather than thinking about the bigger picture, many investors are, not surprisingly, concerned about extreme moves in equity markets and how these affect portfolio valuations.

But there are robust strategies for coping and even benefiting when markets appear to be in freefall, as explained in our 'What to do in a sell-off' feature (IC, 6 March 2020). And it is important not to lose sight of investment trends that are likely to hold firm both now and in the future.

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