Liqian Ma, Head of Impact Investing Research at Cambridge Associates, discusses performance patterns among sustainable investment managers during market downturns.
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“And we're seeing in this environment, the sustainable managers who are focused on high quality, durable cash flows have stayed really resilient in the market volatility that we've seen.”
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More from Liqian Ma
Insight
Ma: Financial markets fail to price in externalities and systemic risks
“Really seeing the excesses during the boom times and seeing the despair and the irrational behavior right after the crisis just made me realize that, wow, like markets are highly inefficient. They are not pricing in externalities and these systemic risks.”
Ma: Allocators should pragmatically iterate into sustainable investing via high-conviction managers
“Because you don't really learn about these issue areas and the best practices until you actually start doing it in some capacity. And we find that those clients who start off with an eye towards fully integrating the portfolio in a sustainability lens, but are…”
Ma: Concentrated sustainable global equity strategies add value through market cycles
“We're finding really strong high conviction opportunities in global equities, for example, that have very high concentration and high sustainability oriented approaches. And they have added a lot of value to portfolios because again, they're focused on that du…”
Ma: Allocators must probe portfolio holdings to catch ESG inconsistencies
“What's really more relevant when you're engaging with these managers is, okay, let's go through your portfolio, and let's go through your holdings, right? How did you arrive at these decisions, given you have this ESG policy? And sometimes you can call out som…”
Ma: Negative screening alone is an incomplete sustainability tool
“So I think it is a tool, certainly, the negative screening, but it is certainly not a complete tool, and you have to combine it and use other tools at your disposal, like proactive solutions oriented investments, sector focused investments, fully ESG integrate…”
Ma: Sustainable real assets provide macro resilience via utility counterparties
“So I think there's a lot of good ballast in that part of the portfolio because these are again, cash flowing. These are typically resilient against macro shocks because your counterparties are utilities, investment grade corporates. So I think typically more s…”
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