Investment

Feel-good funds with positive returns draw legions of responsible investing fans – OrilliaMatters

Published

4 years ago

January 28, 2021

CALGARY — Growing numbers of Canadian investors are putting their money where their hearts are and finding that investing in companies that share their convictions can also deliver respectable returns.

But while options for socially responsible investing (SRI) or investing in companies based on their environmental, social and governance (ESG) ratings are growing, so too are challenges in finding the right investment that also provides growth to meet personal financial goals.

“For an investor, it’s a wonderful time to help make the change you want to see in the world with your money,” said Rajan Bansi, head of RBC InvestEase, the bank’s online investment management service.

He said InvestEase’s ESG portfolios have outperformed its standard portfolios by about 100 basis points over the past two years and are expected to do just as well over a five-to-seven-year market cycle.

“”When you look at ESG investing, right now more than ever, it’s important for Canadians that their investments are reflective of their personal values,” agreed Joe Reid, vice-president of wealth management and impact investing for Vancouver City Savings Credit Union (Vancity).

He said Vancity’s SRI global equity fund outperformed the MSCI World Index, a global equity performance measure, by more than 20 per cent last year, and its Canadian SRI equity fund beat the TSX composite index by over 10 per cent.

The total value of assets under management in Canadian responsible investment funds jumped to $3.2 trillion in 2019, a gain of 48 per cent over two years, according to a trends report from the Responsible Investment Association published in November.

The report found that such funds represented about 62 per cent of Canada’s investment industry, up from 51 per cent two years earlier. It counted no less than seven different categories or types of funds in its survey.

Willis Langford of Langford Financial Inc., a retirement income adviser in Calgary, says he’s hearing the buzz but hasn’t had many clients ask about switching to responsible investing as yet.

He says when they do, he tends to rely on third-party independent rating agencies to figure out which funds have the best ESG or SRI records — and still make money.

“You invest to earn money in a responsible way but it still has to do both,” he said.

At RBC InvestEase, its ESG fund is made up of investments in companies based on how they score in 37 risk areas, Bansi said.

It won’t make any investments in names involved with civilian firearms, conventional weapons, tobacco or “severe controversies,” but it rates the rest and invests more heavily in those with higher scores.

“I consider ESG to be a risk management approach,” he said, noting that “bad actors” tend to have higher costs of business than responsible companies and are therefore under-represented in the ESG fund.

He said the bank is looking at expanding its offerings to give customers more choices in terms of differing shades of responsible investing.

Vancity, which recently set a goal to achieve net-zero carbon emissions from its entire lending portfolio by 2040, has six no-go industries for its SRI investments: fossil fuels, pornography, gambling, military weapons, nuclear power and tobacco.

It also gets involved in corporate activism by urging the companies it supports to make needed changes, said Reid, adding investors need to beware of “greenwashing,” where companies try to disguise or hide their poor habits.

Both Bansi and Reid said it’s important to consult financial advisers and tax experts when making extensive changes to your existing investment portfolio.

There are fewer tax implications when transferring investments inside a registered fund like an RRSP or TFSA but selling a non-registered investment can trigger capital gains and losses that can affect your tax bill and should be done carefully, possibly over several years, they said.

In the past, Reid said, responsible investing was thought to be a high-cost, high-risk, low-reward way to manage your financial future.

“The reality is that investing responsibly no longer means that. Nowadays, investing responsibly is just good business.”

This report by The Canadian Press was first published Jan. 28, 2021.

Dan Healing, The Canadian Press

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

3 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

3 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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