Zhang Hui, manager of Nanfang xinyouxiang fund, said recently that with the increase of MSCI proportion, foreign capital proportion and the maturity of A-share institutional investors, the "institutionalization" trend of A-Shares will become more and more obvious, which will promote the attention of A-Shares to ESG investment and look for "six good" companies on the basis of "three good" companies in the future.
According to the data, as of November 19, 2019, the south new Youxiang fund has increased by 194.80% since its establishment, significantly exceeding the increase of Shanghai Composite Index in the same period.
Zhang Hui introduced that ESG refers to taking the considerations of environmental protection, social responsibility and corporate governance as the indicators affecting decision-making in investment, and integrating ESG into the investment analysis and investment decision-making framework in accordance with the principle of triple bottom line of economy, environment and society.
Zhang Hui pointed out that the A-share institutionalization trend represented by northward funds is expected to further promote the attention of A-share listed companies to responsible investment. In recent years, large international institutional investors have paid more and more attention to the ESG status of listed companies (environment, society and corporate governance). MSCI and other index companies will also rate the companies when selecting listed companies to be included in the index. A large number of research results at home and abroad show that ESG can eliminate companies with relevant risks for investors and create excess returns. MSCI data show that 57% of the global investment scale will be driven or affected by ESG strategy in the next five years. With the improvement of China's financial openness, stocks that meet the requirements of ESG standards may be favored by international capital. ESG investment may become a new banner of A-share investment in the near future.
Zhang Hui said that traditional investment has "three good": good industry, good company and good price. On the basis of considering financial returns, further fully considering the impact of factors such as good environmental protection (E), good social responsibility (s) and good corporate governance (g) on the enterprise, it is to add "three good" to "six good" on the basis of "three good". Such an ESG portfolio may help investors screen companies with stronger long-term performance and greatly reduce risks. Investing in these companies also has a positive social impact.
Specifically, what is the impact of ESG on the portfolio? Zhang Hui believes that for investment, excess return is very important, but risk prevention is more important. ESG investment takes the enterprise's consideration of environment, society and corporate governance as the investment index and follows the triple bottom line principle of environment, society and economy. It is an investment process of controlling risk, discovering value and creating value. From the historical data, ESG investment decision-making framework can effectively avoid risk events, reduce investment losses and increase investment returns.
(China Securities Network)
