Displaying items by tag: tech

Wednesday, 19 January 2022 19:31

A New ESG Trend

AQR is one of the leading quant funds, and they had a difficult 2021, but they are bouncing back big with a new idea in ESG. Their new Sustainable Long-Short Equity Carbon Aware Fund will pick U.S. and foreign equity on a variety of ESG criteria with a net-zero carbon emissions target, but it will also short funds that aren’t meeting ESG standards. Most funds have stayed only on the positive end of things but CEO Cliff Asness believes shorts selling is a key tool that can be leveraged to reduce carbon emissions. Asness will be a portfolio manager on the funds, and his unique perspective on ESG will be critical in how the fund performs in the upcoming years.


FINSUM: Value quant funds like ESG suffered the last two years relative to the market but so far in 2021 AQR has seen huge inflows and its ESG strategy is part of that.

Published in Eq: Tech
Tuesday, 28 December 2021 22:11

How ESG Will Change in 2022

ESG has been one of the fastest-growing stories of 2021 and has taken over every other headline with it. However, things could be shifting in 2022 for ESG, and fund leaders see things shifting for ESG in 2022. The first big area of change will be talent and analysts more catered to addressing and differentiating ESG content. Investors will also face greater scrutiny from compliance officials and regulators, and language will be more cautious moving forwarded. Finally, investors themselves will definitely demand more than just a green label, but rather specifics of how companies are meeting and leading the way in ESG.


FINSUM: If 2021 was the year of explosion in ESG and impact investing, 2022 will be marked by how regulators tightened the reigns on this explosive industry.

Published in Eq: Tech

There is a growing sentiment to regulate the technology sector, and that push isn’t isolated to just the U.S., the rest of Europe is planning on changing regulations as well. However, despite this potential crackdown on the fastest growing sector for over two decades, Morgan Stanley remains bullish on many digital advertising companies like Alphabet, Meta Platforms, Snap, and Pinterest. While Morgan Stanley says there is a bear case, the base case is quite positive for tech companies and the odds of extremely tight regulation cracking down are long. The worst case scenario would be if the U.S. adopted some Euro area approaches to regulation, and whistleblowers would become commonplace in tech.


FINSUM: The moderate regulation scenario is already priced into tech stocks in the U.S. so unless Congress fully revamps its regulation tech stock looks to be bullish.

Published in Eq: Tech
Thursday, 25 November 2021 06:29

Non-income Stocks Getting Hurt

Tech stocks had a big fall this week, but it more importantly it was the concentration of tech stocks that hedge funds loaded up on that took the biggest tumble. For instance, Farfetch Ltd. and Snowflake Inc. faced their largest drops since March. Hedge funds have been bullish on growth stocks and the high value/low income stocks set record holdings dating back to 2002. Driving tech’s downfall are rate hikes being priced into yields and undermining stocks hinging on future cash flows, like tech.


FINSUM: Tech stocks are more fragile than ever because profits are dwindling after the pandemic boost, and future rate hikes could cause serious tech blowback.

Published in Eq: Dividends
Friday, 19 November 2021 19:43

The Hiring Market is Demanding More ESG

Across the best MBA programs like Wharton, Duke, and Harvard business school there is a surging interest in impact investing and climate finance. In the last nine years there has been a 240% increase in enrolment in electives related to social issues at HBS. Money is flowing into ESG and that is boosting a demand for jobs and salaries, and that is peaking the interest of the rising graduates. 19% of graduate students leaving Stanford Business School are taking jobs in and around social impact. Overall this will shape business for years to come because of the exposure to ESG as it is worked in throughout the curriculum regardless if graduates end up taking final positions related to sustainability.


FINSUM: ESG is still a minority interest among rising MBA grads, and that's because salaries may be on the rise but they still trail overall averages.

Published in Eq: Tech
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