Why understanding externalities is increasingly key for investors

With the focus intensifying on the wider consequences of economic activity, it is increasingly important for investors to understand and price externalities.

2021 M07 30

8 minutes

Michael Spinks
Stephanie Niven
With the focus intensifying on the wider consequences of economic activity, it is increasingly important for investors to understand and price externalities.

The fast view

  • With the focus on sustainability intensifying, it is increasingly important for investors to understand companies’ impacts on stakeholders, the natural world and society.
  • We believe there will be superior returns for companies that embrace a more holistic view of success.
  • In this paper, we share the approach used by Ninety One’s Multi-Asset team to evaluate the investment risks and opportunities arising from companies’ externalities.

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General risks
All investments carry the risk of capital loss. The value of investments, and any income generated from them, can fall as well as rise and will be affected by changes in interest rates, currency fluctuations, general market conditions and other political, social and economic developments, as well as by specific matters relating to the assets in which the investment strategy invests. If any currency differs from the investor’s home currency, returns may increase or decrease as a result of currency fluctuations. Past performance is not a reliable indicator of future results.

Michael Spinks
Portfoliomanager
Stephanie Niven
Portfolio Manager

Wichtige Informationen

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Alle darin enthaltenen Informationen gelten als zuverlässig, können jedoch ungenau oder unvollständig sein. Die Ansichten sind die des Verfassers zum Zeitpunkt der Veröffentlichung und spiegeln nicht unbedingt die Ansichten von Ninety One wider.

Alle geäußerten Meinungen werden ehrlich vertreten. Diese sind jedoch nicht garantiert und somit sollte sich auf diese nicht verlassen werden