Abacus DFM Literature
ACUMEN ESG Protection Portfolio
Protection Portfolio Literature
Monthly Portfolio Changes
In August we made several changes to the ACUMEN Portfolios. In fixed income we took partial profit on short-dated US TIPs and sold the 3-to-7-year ‘belly-of-the-curve’ US Treasury ETF. We increased exposure to global government bonds and specifically the long-dated eurozone government bond ETF. In equities we sold our allocation to US industrials and initiated a new position in US healthcare stocks. We also increased our exposure to global ‘quality’ stocks which benefit from strong and stable earnings and tend to outperform during mid-cycle transitions. Within emerging markets, we sold our allocation to Brazil and replaced it with a broad-based ESG screened alternative. In commodities we took profit on our tactical exposure to copper. Finally, we reduced the size of our fx overlay, thereby increasing our US dollar position across the proposition.
Abacus Factsheets – DFM
Abacus Active Profile Factsheets – DFM
Abacus Passive Profile Factsheets – DFM
There are several recent critiques of all things ESG worth addressing. First, Tariq Fancy, ex-CIO for sustainable investing at BlackRock, published an extended essay to explain all sorts of ESG-flavoured problems, which boil down to the charge that in trying to solve various global challenges with market-based solutions, investors are obstructing the less exciting but more important work of policymakers and worse, hyperbolising the impact that their solutions might have. Second, Desiree Fixler, ex-global head of sustainability at DWS, alleged that her former employer misrepresented the extent to which ESG data was integrated into standard asset management processes; regulators in the US and Germany are currently investigating her claim. Calling out foul play is important, but hyperbole works both ways: there are rational rebuttals to many of Fancy’s anecdote-heavy arguments. More, headline-friendly criticism ups the reputational risk for those attempting to adapt to new ESG regulations or best practice methodologies. Investors are in a tricky spot. Move too slowly, and risk losing demand for your product because your competitors have out-innovated you. Move too quickly, and risk losing the trust of your clients if you exaggerate your innovation. We believe a sustainable balance can (and must) be struck. This is what we aim to deliver via our own inhouse ESG proposition.
Abacus SRI Profile Factsheets – DFM