One of the fastest growing areas in investing today is socially responsible investing (SRI) and environmental, social, and governance (ESG) investing. The growth in SRI and ESG has not just been driven by the heightened desire of individual investors to align social and environmental values with portfolios, but also by the realization that ESG metrics can be a valuable gauge of risk and can drive investment performance. It may be surprising to some that SRI has been around for decades, and ESG arrived in the mid-2000s. Inside this research paper published in The Journal of Impact and ESG Investing, “From SRI to ESG: The Origins of Socially Responsible and Sustainable Investing,” Bailard’s own Blaine Townsend, CIMC®, CIMA®, explores the history of SRI and ESG investing.
Inside, you’ll learn:
- How the history of SRI and ESG investing has roots not only faith-based investing but also in the civil rights, antiwar, and environmental movements of the 1960s and 1970s;
- How investment risks posed by climate change and poor corporate governance were a large catalyst to ESG investing;
- How ESG data is now much more widely available than even a decade ago, making ESG investing much more viable; and
- The impact of SRI and ESG on investment returns.
Recent Insights
Quarterly Technology Equity Strategy Q1 2025
The Bailard Technology Strategy posted a 1Q25 total return of -9.35% net of fees—ahead of both the benchmark index (S&P North American Technology Index) and the competitor-comprised benchmarks. The Morningstar U.S. Open End Technology Category returned -9.98% and the Lipper Science and Technology Fund Index returned -10.88%, while the S&P North American Technology Index returned -11.43%. Over longer time periods of 3, 5, and 10 years, the Strategy’s net returns continued to lead the competitor’s peer benchmarks—quite substantially, as seen in the table to the right.
Despite market volatility in Q1, we have not significantly altered our positioning. Our view is that nothing is broken in tech, and we remain convicted in our investment process. With prices and valuation changing dramatically, we expect to optimize our positioning by bolstering or adding high-quality companies trading at attractive discounts to long-term value. We anticipate stabilization in industry fundamentals and fiscal policy in the latter part of this year.
April 16, 2025
Quarterly Small Value Strategy Q1 2025
Policy uncertainty, mixed economic and inflation numbers, and a declining stock market prompted investors to opt for the perceived safety of large cap stocks in the first quarter. Though trade wars disproportionally hurt larger cap stocks due to their much greater international exposure, and the new administration’s proposed deregulatory initiatives relatively help smaller companies, fear of recession eclipsed any other rational analysis during the period. As a result, small cap stocks now appear to be discounting a severe recession based upon price declines, while large cap stocks are barely discounting a mild one.
April 15, 2025
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