Join Samuel Rhee, Chief Investment Officer of Endowus, and Yulin Liu, Investment Lead of Endowus, as they dive into ESG investing in more detail and share a better approach to incorporating ESG themes into your portfolio.
8:22 Introduction to ESG Portfolios
13:20 What is ESG Investing
19:39 How ESG is a great investment opportunity
23:15 ESG investing is important to Singaporean investors and their pain points
29:14 Endowus ESG Portfolio Investment Strategy
37:33 How Endowus grants access and evaluate to best ESG funds in ESG investing
41:38 Endowus' ESG Portfolio is globally diversified
49:50 Holistic processes of ESG Integration
56:00 Difference between Endowed Core vs Endowus ESG Portfolios
1:01:40 Get Started with your ESG investing journey at Endowus
What is ESG Investing and why is it important? (13:20)
ESG investing is a strategy and practice to incorporate environmental, social and governance factors in investment decisions and active ownership. Traditionally, when we make an investment decision the consideration is mostly financial. For example, one would analyse the financial statements of the company and how it is strategically positioned against its competitors to have a view on the company's growth potential and its evaluation, whether it is undervalued or overvalued before you make a conviction on an investment decision.
All ESG is calling for is that investors should look at how companies are treating the environment and take hold of different parts of the society like the suppliers and the employees.
This is important both from an ethical standpoint (as an ethically conscious investor you would not want to invest in an irresponsible company or stocks) and a financial standpoint because ESG investing can provide you an information edge compared to other investors to the market.
How ESG is a great investment opportunity (19:39)
From an investment perspective, it represents great investment opportunities. The scale of change needed and the amount of capital required to align the sustainable objective is huge. It is exciting to see all the global organisations, regulators and investors really pushing this sustainable movement forward, which will ultimately create efficiency and long term value for all of us.
Under the 2015 Paris Agreement, nearly 200 countries agreed to limit global warming to no more than 2?C for the long term. To achieve this target, it is estimated that the amount of investment required is about 2 trillion per year, which translates to 15% of the global equity market. The amount comes from different agencies, such as different governments, international organisations (eg. IFC) and corporates. The implication of this scale for the public market of investors is that there will be more investment opportunities and rewards.
For example, the Green Bond Market has taken off the past few years, it has grown from a mere size of 76 billion to 161 billion from 2013 to 2020. ESG investing is on the rise and it is expected to grow. As of 2020, it is estimated that 40.5 trillion assets invested globally now incorporate some kind of ESG data and there was 80.5 billion inflow to ESG funds in the third quarter of 2020 alone.
How Endowus grants access and evaluate to best ESG funds in ESG investing (37:33)
We are offering exclusive access and costs. We have looked into the way these funds have invested, we have had our calls and done long due diligence research with the managers of these funds, we have spent time pouring over their reports, we have developed our own rationale on funds and selection process.
These are the funds we believe are the ones executing at a very high level. We have worked with these managers to bring in funds. For example, two funds are not available on any other platforms. The JP Morgan Global Bond Opportunities Sustainable Fund and the PIMCO GIS Climate Bond Fund are the two funds that have just been launched or only available at private banks or institutional investors and have not been made available to retail investors. They are exclusively available to Endowus.
We launched and seeded the PIMCO Climate Bond Fund (the first climate bond fund that PIMCO is launching in Singapore), it is an institutional share class so it's the lowest fee -- much like ? the cost of a retail PIMCO bond fund. The first climate bond fund with green bond exposure is brought to Singapore with Endowus by Endowus together working with PIMCO (the largest fixed income manager in the world and a leader in the sustainability space).
QnA: How does passive ETFs and active fund management work in the ESG investing space? (1:09:51)
In the ESG investing space, passive investing is not truly passive because there is always going to be somebody who is going to create a benchmark based on some measure -- negative and positive screening, and certain values - so active decision from someone has to be made. The only thing you can do passive is expose yourself to a market. The moment you start implementing an Environmental or a Social or a Governance factor into investing it becomes an active component.
QnA: What is the difference between Endowus Core Portfolio and Endowus ESG Portfolios?(1:10:33)
A major difference between Endowus Core and Endowus ESG Portfolio is that Core is mainly passive (broad market exposure globally) while ESG is going to be a much more narrow exposure to certain parts of the market which have high quality ESG components and factors.
Find out more about the latest news on Endowus ESG investing here.
Get a head start on financial literacy & general investing by watching our Investing 101 with Endowus 4-part series here.
Investment involves risk. Past performance is not necessarily a guide to future performance or returns. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.
Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endow.us Pte. Ltd (“Endowus”) and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus Pte. Ltd., its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. You may also wish to seek financial advice through a financial advisor or the Endowus platform and independent legal, accounting, regulatory or tax advice, as appropriate.
Investment into collective investment schemes: Please refer to respective funds’ prospectuses for details of the funds, their related fees, charges and risk factors, The listing of units of the fund on a stock exchange does not guarantee a liquid market for the units. Before making an investment decision, you are reminded to refer to the relevant prospectus for specific risk considerations.
For Cash Smart Secure, Cash Smart Enhanced, Cash Smart Ultra: It is not a bank deposit and not capital guaranteed, and is subject to investment risks, including the possible loss of the principal amount invested. Investment products are not insured products under the provisions of the Deposit Insurance and Policy Owners Protection Schemes Act 2011 of Singapore and are not eligible for deposit insurance coverage under the Deposit Insurance Scheme. Interest rates are indicative and subject to change at any time.
Product Risk Rating: Please note that any product risk rating (the “PRR”) provided by us is an internal rating assigned based on our product risk assessment model, and is for your reference only. The PRR is subject to change from time to time. The PRR does not take into account your individual circumstances, objectives or needs and should not be regarded as advice or recommendation to purchase, hold or sell any fund or make any other investment decisions. Accordingly, you should not solely rely on the PRR in making your investment decision in the relevant Fund.
This advertisement has not been reviewed by the Monetary Authority of Singapore.