Invest
Climate change picked to create big investment headwinds
Investors have been encouraged to consider the effects of climate change as a significant headwind to portfolios in the future, as investments remain at risk of physical and financial impacts.
Climate change picked to create big investment headwinds
Investors have been encouraged to consider the effects of climate change as a significant headwind to portfolios in the future, as investments remain at risk of physical and financial impacts.
In AMP Capital’s latest analysis, Kirsten Le Mesurier, portfolio manager of the multi-asset group, encouraged investors to assess the level of risk climate change possesses to their portfolios, regardless of their personal views on the debate.
“Some investors don’t believe in climate change and believe that any consideration of it in an investment process means sacrificing return,” she wrote.
“It should be considered as part of investment decisions.
“Not considering these impacts would mean ignoring the potential impact on share prices and investment returns.
“Where an investor arrives on the climate change spectrum is very relevant to portfolios,” she said.
According to Le Mesurier, climate change will likely impact economic growth in two key areas moving forward, namely the physical impact and financial impact.
She recommended investors consider the effect changing weather patterns and an increase in regulation to lower the carbon economy will likely have on investments in areas such as agriculture commodities.
Ms Le Mesurier said future value may be found in diversifying allocations to include companies dedicated to low carbon emissions, clean technology, sustainable farming, community infrastructure and green bonds.
ESG a focus for investors
Her words come as a new data from The US Forum for Sustainable and Responsible Investment released last week revealed environmental, social and governance (ESG) investments in the US has quadrupled from $3 trillion of all professionally managed assets in 2018 to $12 trillion today.
This represents one in four dollars of the total US assets under professional managements.
According to the latest KPMG data released in August of last year, this trend is reflected amongst Australian investors, as responsible investment constituted $866 billion in assets under management as of 31 December 2017.
This equates to 55.5 per cent of total assets professionally managed in Australia and is up 39 per cent from $622 billion the year prior.
This trajectory is predicted to continue in 2019.
RELATED ARTICLES
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
Stock market rally likely to continue regardless of Fed minutes tone, says deVere CEO
The bull run that has propelled Wall Street's major indexes to record highs this month is expected to continue regardless of the tone of the upcoming Federal Reserve minutes, according to Nigel Green, ...Read more
Stock market
US stock rally driven more by valuation growth than earnings, leaving tech names vulnerable: Innova
The strong gains in US stocks over the past year, particularly in the technology sector, have been driven more by expanding valuations than underlying earnings growth, leaving them exposed to a ...Read more
Stock market
Sun Silver to make its ASX debut with a $13 million IPO
Sun Silver Limited (proposed ASX Code: "SS1") has announced the opening of its Initial Public Offering (IPO) today, aiming to raise a minimum of $10 million and a maximum of $13 million (before costs)Read more
Stock market
Nasdaq hits record high, underscores the value of tech in investment portfolios
The Nasdaq Composite's surge to an all-time high last Friday highlights the importance of incorporating technology into investment strategies. Read more
Stock market
Apple sets an unprecedented profit pace within the GAFAM group in 2023
After navigating through the economic difficulties presented in 2022, the technology sector has demonstrated resilience and growth, with many companies seeing increases in revenue and stock value. Read more
Stock market
Fintech startup okoora unlocks over $3 billion in forex savings for businesses
Fintech innovator okoora has announced it has saved customers a monumental amount over $3 billion through international foreign exchange transactions. Read more
Stock market
Google's Gemini edges out ChatGPT4 in groundbreaking AI showdown
Google's latest AI model, Gemini, has edged out OpenAI's ChatGPT4 in a recent set of rigorous multi-discipline tests, marking a significant milestone in the large language model (LLM) sector. Read more
