Viewpoints

While a big payday for a CEO is not headline material anymore, it still makes most people queasy. When a CEO earns $20 million in one year, it would take someone making $100,000 a year more than four lifetimes to earn the same amount. Balance matters.

Should investors looking for “sustainable stocks” go active or passive? Some market participants suggest the latter, proclaiming exchange-traded funds (ETFs) to be the future drivers of growth in sustainability investing. The problem with these passive, index-based vehicles is that they too often fail to distinguish between companies with the best ESG credentials and those that are just scraping by. Therefore, we believe an active approach is warranted.

A growing emerging markets middle class and increased domestic demand may reduce poverty across the planet, and also provide fertile ground for investors. Companies that can consistently deliver to increasingly wealthy EM consumers stand to profit.

In this Viewpoints paper, Gary Thompson, Head of Trading, explains how overseas investors can get exposure to Chinese A-shares and Chinese Depositary Receipts (CDR).

In this Viewpoints paper, Igor Krutov, Director of Research, explains why most European banks suffer from structurally poor profitability. Even “average” U.S. regional banks are earning ROTEs (returns on tangible equity) in the mid-teens, something most European banks can only dream of.

As bottom-up quality growth investors, our choices are not generally driven by macro factors such as inflation. But it is important to test the strength of our portfolio against macro challenges.

Brazil has sold off as the market fears the country is in trouble. If the huge pension program is not reformed, it will add expense to a budget already in deficit – and reform has proven extremely difficult. On top of this, there will be a new President elected in October. The race is so open and full of new and anti-establishment candidates, there is a fear that reform may languish along with the country’s finances.

Legendary baseball star Yogi Berra opined that, “You don’t have to swing hard to hit a home run. If you got the timing, it’ll go“. That may work in baseball, but in the world of investing, timing is a difficult, some say an impossible skill to master.