Equities

Child labor and imposing unnecessary medical procedures on women were recently identified in the sugar industry in India. While multinationals such as Pepsi and Coca-Cola are not directly linked to poor labor conditions, they can affect change. As active investors, we engage with our portfolio companies on these important issues.

Is ESG simply a different label for quality or could quality stand as a less controversial and politically sensitive description of highly sustainable companies? The question of whether ESG characteristics of listed companies form a new independent factor and a distinctive source of returns is an important one to address.

A company’s competitive advantages are referred to as its moat. Far from castles and the countryside, it is important to analyze the strength and durability of a company’s moat before investing. Since moats can be wide or narrow and change over time, competitive advantages must be constantly monitored.

Many US investors are overweight domestic versus international strategies for the wrong reasons – home bias and benchmark anchoring. In our view, investors should focus on great companies, regardless of where they are domiciled. An active international strategy can help US investors expand their opportunity set, diversify risks, and improve their portfolio returns.

Adding women to corporate boards can improve the impact a board has on company performance. Yet progress has been slow. Companies that recruit former CFOs and CEOs simply cannot find enough female board members. Expanding talent pools can bring more women into the fold.

We believe answers to critical questions about weight loss drugs will help determine the sustainability of success that some pharmaceutical stocks have enjoyed: How many people will be on the drug, and at what price? Which pharma company will be the winner of the R&D race?

Over time the definition of quality has broadened and become subject to a variety of interpretations, with sometimes significant divergence in the performance of quality strategies depending on market conditions.

Is a company that sells a $300 t-shirt a better investment than one that sells a $10 t-shirt? The answer lies in the strength of a company’s brand and, in turn, its pricing power. Or course, profit margins are an important consideration.

David Souccar, portfolio manager and senior research analyst, explains why, in the quest for quality, your portfolio shopping basket would be incomplete without a trip to the international aisle.

Are stock markets poised for a good year in 2024? Jean-Louis Nakamura, head of the Convictions Equities Boutique takes a comprehensive look at the various factors that indicate it may well be.

Welcome to this year’s first edition of mtx perspectives, which will highlight interesting developments across the world of global emerging markets. We start with a look at the digital revolution in Latin America.

Portfolio Manager David Souccar identifies three types of quality companies: Leaders have a rare combination of high returns and high predictability, Defenders grow slower but can protect in down markets, and Opportunity seekers can profit in uncertainty but are less predictable. Like a high-performing team, a successful quality portfolio has the optimal combination of all types of players.

As the landscape shifts, investors may now be exposed to risks that were previously disguised by a prolonged era of accommodative monetary policy. Today, it pays to be wary. A focus on quality can protect in a downturn and provide a smoother ride through the cycle.

Legendary investor Charlie Munger, who recently passed away, followed a simple philosophy of “soldiering on” – persevering through challenging times while also knowing when to seize opportunities. Munger’s wisdom guides us as we manage key risks and seek to find opportunities in 2024.

For the world to meet net-zero targets, massive energy transition capital is required. Governments can’t fund this alone. Asset allocators have a role to play and impact investing will be key.

Nature is our source. Challenges to natural capital are prompting the world to rethink its relationship with nature and the value we place on it. This article provides a bird-eye view of why investors should care about the semantics and monetization and regulation of nature.

A healthy and robust economy and society depends on healthy biodiversity. But rapid development has resulted in the dramatic degradation of our ecosystems, which can impede further economic progress while posing an existential threat. How can we better value nature to turn this trend around?

Asking the right question is a skill in itself. Read the FAQ seasoned investors ask our impact investing experts.

Recent advances in generative artificial intelligence have propelled some stocks in the tech space to nosebleed valuations. By failing to distinguish the level of certainty around the long-term benefits of AI, markets have disproportionally rewarded some companies. Is this playing out in a logical way? Or is the market missing something crucial?

Change rests in our hands. Impact investing is gaining in popularity as investors look for increasing sustainability in all areas of life. We share three reasons that institutional and professional investors told us keep them turning to impact.

Don’t fall prey to the myths surrounding impact investing.

The environmental crisis is undeniable, and the world needs an urgent plan. Investment firms have an important role to play. In the latest Impact Report for Vontobel’s Global Environmental Change strategy, the Impact Investing team assesses how its holdings have helped mitigate sustainability challenges, but also delves a bit deeper: find an overview of the sustainable-finance landscape and an in-depth examination of the regulatory environment into selected key developments.

The wave of alarming headlines can sometimes seem to dwarf the social challenges the world faces. But Impact investing addresses a wide array of important issues that may be a bit more difficult to grasp. The latest Impact Report for Vontobel’s Global Impact Equities strategy provides case studies to highlight the steps towards positive change.

China’s last few years have presented new economic challenges, and Beijing has completely rewritten its policy priorities and playbook. But looking ahead, this does not mean Chinese investment won’t be rewarded in the future; rather that policy-compliance should be a criterion considered by investors.