Portfolio Manager
Keep up with the latest sustainable insights
Join our newsletter to explore the trends shaping SI.
• Insight
Balancing sustainability and returns: What multi-asset investors need to know
Investors and wider society increasingly demand more sustainable investments – but does it come at the cost of returns? Historically, we can show that sustainability has improved multi-asset risk-adjusted returns, which supports the belief that more sustainable companies perform better in the long run, and this feeds through into the returns of mixed equity and corporate bond universes. The question is whether the costs justify the journey.
Authors
Client Portfolio Manager
Head of Solutions Research
In this article, Robeco’s Sustainable Multi-Asset Solutions team discusses the impact that integrating sustainability actually has on risk-adjusted returns over the past six years to the end of 2023. We use Robeco’s SDG Framework, mapping out the contributions that companies can make to the Sustainable Development Goals (SDG) as the principle means of ‘defining’ sustainability, and see how this feeds through into returns.
Certainly, some kind of price is paid, as the analysis shows that excluding less sustainable investments from multi-asset portfolios brings greater market deviation against traditional benchmarks. Additionally, the research shows that differing sectors and regions often cause short-term differences in performance due to the various biases that can creep in. But it does prove worthwhile in the medium-term.
And in any event, increasing regulation means investors will have to consider sustainability factors whether they find it convenient or not, making it imperative to understand how to balance sustainability with the returns that are needed by stakeholders over the market cycle.
How SI works
Important information
THIS WEBSITE IS SOLELY INTENDED FOR PROFESSIONAL INVESTORS, WHICH HAS THE MEANING ASCRIBED TO IT IN THE SECURITIES AND FUTURES ORDINANCE (CAP. 571 OF THE LAWS OF HONG KONG) AND ITS SUBSIDIARY LEGISLATION. Investment involves risks. Past performance is not indicative of future performance. The information contained in this website is provided for reference only and does not constitute investment advice or an offer or solicitation to buy or sell in any securities or to adopt any investment strategy. Investors should not base their investment decisions solely on the information provided on this website and are advised to seek independent advice (including advice on tax implications) before making any investment decisions. Investors should ensure they fully understand the risks associated with the investment products and should also consider their own investment objectives and risk tolerance level. The investment decision is yours. You should not invest unless the intermediary who sells you the investment products has advised you that it is suitable for you and has explained how it is consistent with your investment objectives. Please refer to the relevant offering documents or other legal documents for further details including the risk factors. This website is published by Robeco Hong Kong Limited which is regulated by the Hong Kong Securities and Futures Commission (“SFC”) (CE No. APU851). This website has not been reviewed by the SFC. No assurance can be given that the investment objective of any investment products will be achieved. No representation or promise as to the performance of any investment products or the return on an investment is made. The value of investments may fluctuate. Past performance, projections, or forecasts included in this website should not be regarded as guarantees or indications of future performance, and no express or implied warranty is provided. The contents of this website are based on sources believed to be reliable, but due to the nature of information delivery technology and the necessity of using multiple data sources, including third party content, their accuracy is not guaranteed. The opinions expressed are as of the date shown above and may change as market conditions evolve, and are subject to change without notice. These opinions may differ from those of other Robeco investment professionals. Robeco accepts no liability for any direct, indirect, or consequential loss arising from the use of this material or any comments, opinions, or estimates contained herein. Robeco has no duty to update this website or any website content. Materials on this website may not be reproduced, distributed, or published without prior written permission from Robeco. Unless otherwise specified, Source: Robeco.
