We stand with you: Overcoming setbacks

March 30, 3030

5 min read

Peter Clive Charrington

Citi and investment strategy

Harlin Singh

Head of sustainable investing

The greatest successes in life are almost inevitably preceded by multiple setbacks. Indeed, it is by overcoming these setbacks that we often enable the ultimate resolution. Link Example Here

Key Messages

Rather than returning to our prior normality after COVID-19, we believe many investors wish to “build back better”

We note strong performance from many ESG focused managers in the first quarter of 2020, which we we believe could continue longer term

We believe such investors can, indeed, effect positive change with private capital

The goal of building back better includes stepping up efforts to combat climate change, use natural resources more widely, and expand vulnerable communities’ access to employment, education, and healthcare

The harsh realities and increasing realization of the interconnected factors underpinning COVID-19’s impact have, in our experience, driven investors to aspire not to return to their former “normal” but, rather, to “build back better.” For investors who choose to build back, this takes many forms. Some want to double down on their efforts to combat climate change, develop clean energy, or drive adoption of wiser natural resources use.

Some have a fierce resolve to expand vulnerable communities’ access to things like education, employment, and basic needs such as clean water, food and like healthcare. Many seek all of the above.

At Citi Private Bank, we believe such investors can, indeed, effect positive private capital. We established Investing with Purpose (IwP), our open-architecture platform of sustainable investments with a dual mandate achieving.

I think more than ever with this fight we all have to unite. We have to act as one global community indeed and fight this common enemy (Covid-19),which has affected all of us in so many different ways.

Harlin Singh

Head of Sustainable Investing

At Citi Private Bank, we believe such investors can, indeed, effect positive change with private capital. We established Investing with Purpose (IwP), our open- architecture platform of sustainable investments with a dual mandate of achieving competitive financial returns and driving positive societal change with vehicles that integrate Environmental, Social and Governance (ESG) criteria.

Figure 1

US ESG-focused funds YTD return in the context of the broader US equity market

1 Source: Morningstar Direct 1 Jan 2020 – 31 Mar 2020. Note: Oldest share class used for mutual funds. We compared the returns of all 206 sustainable equity open-end and exchange-traded funds available in the US with their peer groups. Peer groups per Morningstar categories: buckets funds based on region, market cap, and style, and contains both sustainable and conventional funds. Past performance is not indicative of future results. Environmental, social and governance (ESG) principles should not be the only consideration when making an investment decision. Selecting investments based on ESG principles will not guarantee positive future returns. There can be no assurance that any Socially Responsible Investing (SRI) screening process will achieve its goals or that an investment will not incur losses.>

The growth of sustainable investing reflects this appeal of ESG as an additional lens alongside traditional fundamentals. It also provides investors an opportunity to invest in alignment of the changes they want to see in business practices, the environment or society. Choices frequently cited include health care, biotech, clean energy and affordable housing.

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Vis-à-vis a pandemic such as COVID-19, ESG considerations are thick on the ground. If one had to select just one criterion each for E, S, and G, needs for the clean water that allows for hygienic manufacture of medicine and vaccines, mechanisms that determine and deliver the vaccines to those at greatest risk, and safety protocols that enable fasttracking trials and they production spring to mind. Vis-à-vis a pandemic such as COVID-19, ESG into all considerations are thick changes they want to see in business practices.

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It is worth noting that in the first quarter of 2020, 70% of US ESG-focused funds delivered top half performance.1 This is consistent with ESGfocused ESG managers’ superior risk-adjusted returns relative to traditional managers from 2010 through 2019.

We stand with you: Overcoming setbacks

The greatest successes in life are almost inevitably preceded by multiple setbacks. Indeed, it is by overcoming these setbacks that we often enable the ultimate resolution.

We stand with you: Overcoming setbacks

The greatest successes in life are almost inevitably preceded by multiple setbacks. Indeed, it is by overcoming these setbacks that we often enable the ultimate resolution.

We stand with you: Overcoming setbacks

The greatest successes in life are almost inevitably preceded by multiple setbacks. Indeed, it is by overcoming these setbacks that we often enable the ultimate resolution.