The investment world has changed. The perception used to be you might have to sacrifice returns if you wanted to invest in ways that made a positive social impact. Not anymore. In fact, including social responsibility as part of your investment decisions can actually help de-risk, diversify and enhance returns.
In a new issue of UBS House View monthly letter, "Sustainable performance ," CIO Americas, Wealth Management (CIO) examines how the sustainable investing market has broadened and deepened, enabling private investors to now achieve the goals of traditional diversified portfolios with sustainable assets.
In this monthly letter, our strategists outline some of the sustainable investing exposures they believe can be used to construct portfolios with a similar risk-return profile to traditional portfolios, including:
- Bonds, including green bonds and Multilateral development bank (MDB) bonds
- Equities, including thematic equities and those exposed to various degrees of environmental, social and governance (ESG) factors
CIO also discusses two new House View preferences this month
- Within its foreign exchange strategy, CIO now prefers a basket of four high-yielding emerging market (EM) currencies vs. a set of four pro-cyclical lower-yielding counterparts.
- CIO is also now overweight a diversified basket of EM local currency bonds against government bonds.
For more on CIO’s investment outlook and portfolio recommendations, read Sustainable performance .