Video Transcript: Sustainable investing: Here’s what you need to know video
Side note:
Upbeat synth music plays.
Legal disclosures appear.
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Investment and Insurance Products:
- Not a deposit
- Not FDIC insured
- Not insured by any federal government agency
- No bank guarantee
- May lose value
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J.P. Morgan Wealth Management logo.
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A woman with straight black hair and brown eyes speaks to us from her office.
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Anjali Paranjpe, Portfolio Specialist, J.P. Morgan Wealth Management.
Anjali:
Sustainable investing is one of the most powerful investing trends, and it’s no surprise why. It allows you to invest with intention, which can make investing that much more personal.
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Wind turbines tower over acres of farmland. A solar panel array stretches across a green hill on the outskirts of a small town.
Anjali:
There are four main approaches within sustainable investing and I'm here to give you the rundown on each.
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Ms. Paranjpe takes a pen, writes in her notebook, and then slightly moves the laptop computer on her desk.
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Bird's Eye View.
Sustainable Investing.
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Groovy music plays.
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Ms. Paranjpe speaks to the viewer.
Anjali:
The four main Sustainable Investing approaches include: exclusionary screening, environmental social and governance integration, thematic investing, and impact investing. Let's start with exclusionary screening.
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An icon appears, showing an illustration of a man and a woman. It's labeled: "Exclusionary screening."
Anjali:
Exclusionary screening simply means not investing in companies or sectors that don’t align with your values. You or your financial advisor can set rules around removing specific companies that you don't want to put your dollars towards.
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A montage shows a financial advisor speaking to his client on the telephone, a brewery plant, and dice rolling on a game table.
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Common sectors people like to exclude:
- Alcohol;
- Tobacco;
- Fossil Fuels;
- (and) Gambling.
Anjali:
It's as easy and customizable as that. Next up is environmental, social, and governance integration.
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An icon appears, showing an illustration of two gears. It's labeled: "ESG Integration."
Anjali:
ESG Integration means incorporating environmental, social, and governance issues into your analysis when you decide whether or not to make an investment. You might do this because it’s important to your personal value system, you believe these companies will do better financially over time, or a combination of the two.
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A montage shows an electric car charging at an electric vehicle charging station, contractors reviewing blueprints, and a clean energy power plant.
Anjali:
While it's tough to quantify, recent data has shown that companies with highly-rated ESG practices have held up just as well, and as a whole have even outperformed the general global investment opportunity set – with less volatility.
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A bar chart appears, labeled "Global ESG leaders have shown stronger performance with less volatility." It shows the 10-year annualized return at at:
- 10.90% for MSCI ACWI ESG Leaders;
- (and) 10.48% for MSCI ACWI.
The chart shows volatility at:
- 13.50% for MSCI ACWI ESG Leaders;
- (and) 14.03% for MSCI ACWI.
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Small print text appear.
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Source: MSCI. As of June 30th, 2021.
Past performance is not a guarantee of future results.
Anjali:
Finally, there's thematic investing and impact investing.
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An icon appears, showing an illustration of an automated factory's robotic arm. It's labeled: "Thematic Investing."
Anjali:
Thematic investing allows you to invest in companies and projects that target specific issues or themes that are meaningful to you. For example, say you want exposure to companies innovating in the green energy space, or those that are focused on building out access to clean water around the globe.
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A montage shows electric car prototypes in a research and development building, a vast solar energy farm with panels spread out for miles, and a waterfall in a pristine environment. An icon appears, showing an illustration of a globe resting in the palm of a hand." It's labeled: "Impact Investing."
Anjali:
As for impact investing, it's all about putting your money to work in companies or projects with an explicit mission to generate a positive social, environmental, or other values-based impact. All the while potentially generating a gain on your investment. And, more than 88 percent of investors reported that their investments met or exceeded their financial expectations.
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88%.
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Source: Global Impact Investing Network, 2020, Annual Impact Investor Survey (June 2020).
Anjali:
Overall, we all have our own individual set of values. So why wouldn’t we reflect those in something as personal as our finances? Whether your goal is to manage risk and potentially strengthen your portfolio returns, invest in causes that you care about or avoid the ones that you don’t, it may be worth considering how you can incorporate a sustainable investing approach in your portfolio.
On Screen:
A montage shows a wind turbine, clear water running from an outdoor faucet, a charging connector attached to an electric car, and a solar power array.
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J.P. Morgan Wealth Management logo.
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Legal disclosures appear.
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ESG and sustainable investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved. Investment trends may not materialize. Sustainable investing and investment return are not always aligned, and may lose value.
Past performance is not a guarantee of future results.
The price of equity securities may rise or fall because of changes in the broad market or changes in a company’s financial condition, sometimes rapidly or unpredictably. Equity securities are subject to “stock market risk” meaning that stock prices in general may decline over short or extended periods of time. In general, the bond market is volatile and bond prices rise when interest rates fall and vice versa. Longer term securities are more prone to price fluctuation than shorter term securities. Any fixed income security sold or redeemed prior to maturity may be subject to substantial gain or loss. Dependable income is subject to the credit risk of the issuer of the bond. If an issuer defaults no future income payments will be made.
This video and its content have been developed for J.P. Morgan Securities LLC clients and prospects and is for informational and educational purposes only. It is designed to provide general market commentary and information relating to certain services offered by J.P. Morgan Securities LLC, an affiliate of JPMorgan Chase & Co. Opinions expressed herein are those of the author and may differ from those of other J.P. Morgan employees and affiliates. The information in no way constitutes J.P. Morgan research and should not be trusted as such. Further, the views expressed herein may differ from that contained in J.P. Morgan research reports.
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