BY CLICKING ON “I AGREE”, I DECLARE I AM A WHOLESALE CLIENT AS DEFINED IN THE CORPORATIONS ACT 2001.
What is a Wholesale Client?
A person or entity is a “wholesale client” if they satisfy the requirements of section 761G of the Corporations Act.
This commonly includes a person or entity:
We use indexes in portfolio construction to access broad market exposures in a cost-efficient manner. We can realize those benefits and simultaneously seek to increase resilience by refining indexes to eliminate certain companies or sectors associated with negative ESG characteristics, or by tilting towards higher ESG scores. The potential for improved resilience was displayed in the first quarter of 2020, and other recent downturns as shown below.
Source: BlackRock, December 2020. For illustrative purposes only. Analysis based on a set of 32 globally-representative, widely analysed sustainable indices and their non-sustainable counterparts.
Factors target broad, persistent drivers of return across and within asset classes. While ESG itself is not a factor, the frontier of factor research is to incorporate ESG data into the factor definitions themselves. For example, we have used machine learning techniques to quantify corporate culture as part of our quality measures.
Alpha is about seeking idiosyncratic returns that are independent of index and factor exposures. This typically involves targeting unique and harder to access insights – including those related to ESG. In other words, incorporating sustainability data is a way to broaden the total amount of information we consider and seek to identify previously unpriced risk and opportunity. We do this through both systematic and fundamental approaches.