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Matthias Knab, Opalesque: Fred Alger Management writes on Harvest Exchange:
One of the largest transfers of wealth - an estimated $30 trillion over the next few decades - will
occur as Baby Boomers pass money to younger generations. What do you think the younger
generations value?
As it turns out, 85% of Millennials own or are interested in adding ESG. For the generation X - the generation born after that of the baby boomers (roughly from the early 1960s to late 1970s) - the percentage is still 55%.
According to recent studies and surveys,
- U.S. assets invested according to ESG principals soared to $8.7 trillion, an increase of
33% from 2014 to 2016, as the high level of interest in sustainability has translated to
actual investing.
- Many younger investors are mindful of a company's social and environmental impact
when making investment decisions. Two reasons they cite are "It's the right thing to do,"
and "Companies that have a positive impact have better financial performance."
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An eight-year study released in 2016 assessed the hypothetical performance of a
portfolio that "tilted" toward, or over-weighted, ESG names. The portfolio's return
exceeded the MSCI World Index over the eight-year period by 1.06% per year,
about 40% of which was due to stock-specific contribution.
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