BlackRock's New Position on Climate Change

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anonenigma
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BlackRock's New Position on Climate Change

Post by anonenigma » Fri Jan 17, 2020 9:15 pm

This interview with Brian Deese, head of sustainable investing at BlackRock, was on this evening's PBS News Hour. It's just a few minutes but definitely worth watching:

https://www.pbs.org/newshour/show/why-c ... al-markets

usagi
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Re: BlackRock's New Position on Climate Change

Post by usagi » Fri Jan 17, 2020 9:20 pm

Ha, first one in before the thread is locked for not being actionable.

Fclevz
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Re: BlackRock's New Position on Climate Change

Post by Fclevz » Fri Jan 17, 2020 9:23 pm

This new position isn’t going to affect their ETF’s, right?

Although, I suppose that if enough people changed their investing perspective, the market itself would change too, eventually.
Last edited by Fclevz on Fri Jan 17, 2020 9:27 pm, edited 1 time in total.

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fortfun
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Re: BlackRock's New Position on Climate Change

Post by fortfun » Fri Jan 17, 2020 9:24 pm

usagi wrote:
Fri Jan 17, 2020 9:20 pm
Ha, first one in before the thread is locked for not being actionable.
I see a lot of investing articles/podcasts posted on this site. It would be too bad if this one was locked just because climate change is the subject. Afterall, BlackRock is a pretty big deal in the investment world.

Dottie57
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Re: BlackRock's New Position on Climate Change

Post by Dottie57 » Fri Jan 17, 2020 9:26 pm

It will affect non index etfs.

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anonenigma
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Re: BlackRock's New Position on Climate Change

Post by anonenigma » Fri Jan 17, 2020 9:33 pm

usagi wrote:
Fri Jan 17, 2020 9:20 pm
Ha, first one in before the thread is locked for not being actionable.
Not actionable? BlackRock manages over $7 trillion. What it says impacts markets.

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JoMoney
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Re: BlackRock's New Position on Climate Change

Post by JoMoney » Fri Jan 17, 2020 9:46 pm

BlackRock is getting into the ESG business, and wants to sell the story that if you buy funds from them you're a part of "the story". This sort of marketing is all the rage for branding these days. I'm sure it will sell to some people.
What's your brand story? (TEDx video)
They're not going to make money competing with Vanguard on the cost-cutting story, and while maximizing shareholder returns would be a great "story" for a financial company it's not something they're likely to be able to do. Climate change models and predictions can change every decade and the story still seems to work.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

MnD
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Re: BlackRock's New Position on Climate Change

Post by MnD » Fri Jan 17, 2020 10:49 pm

Vanguard coming out with a broad US ESG stock index fund (1500 stocks) at ER .12 and and all cap all-country international ESG fund (3000-4000 stocks) at ER .17 are game-changers IMO.

Per the interview link:
"And going forward, the future savers and the future investors are the young people today, and they have different expectations, and they are going to speak with their capital."

example of actionable:
Over the holidays after asking her about her investments, I helped my 26-YO daughter transition from total US and total ex-US to these funds along with a money-market fund for a 3-fund portfolio. Simple, low expenses and she feels a _lot_ better about equity investing going forward. These funds have certainly had a strong launch performance-wise and going forward I don't see why these might not also be a profitable "factor" - so possibly a win-win for doing good and performing as well or better than traditional us/ex-US total funds.

https://investor.vanguard.com/etf/profile/ESGV
https://investor.vanguard.com/etf/profile/VSGX
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.

gutrageous
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Re: BlackRock's New Position on Climate Change

Post by gutrageous » Fri Jan 17, 2020 10:53 pm

"ES&G" is the latest rage. There was a recent article from the WSJ on BlackRock regarding this issue in particular. A few excerpts below-

“Climate change has become a defining factor in companies’ long-term prospects,”
BlackRock Chief Executive Laurence Fink said in his annual letter. “The evidence on
climate risk is compelling investors to reassess core assumptions about modern finance"

Later in the article.....

“The moves come as regulators are scrutinizing funds………”

So the evidence on climate risk is compelling investors to reassess their assumptions about modern finance but it just so happens to be the same time that regulators are cracking down? OK. At the end of the day, i'm a believer that investment dollars will find their way to the highest returns and i'm not sold that ES&G filters alone will yield the best opportunities going forward.

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CyberBob
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Re: BlackRock's New Position on Climate Change

Post by CyberBob » Fri Jan 17, 2020 10:56 pm

I never noticed the funds before, but it looks like you can do an ESG indexed 3-fund portfolio at Fidelity too.

Fidelity US Sustainability Index Fund ( FITLX )
Fidelity International Sustainability Index Fund ( FNIDX )
Fidelity Sustainability Bond Index Fund ( FNDSX )

UpperNwGuy
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Re: BlackRock's New Position on Climate Change

Post by UpperNwGuy » Fri Jan 17, 2020 10:58 pm

Glad to see a large company like BlackRock taking an interest in problems like climate change.

guyinlaw
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Re: BlackRock's New Position on Climate Change

Post by guyinlaw » Fri Jan 17, 2020 11:04 pm

anonenigma wrote:
Fri Jan 17, 2020 9:15 pm
This interview with Brian Deese, head of sustainable investing at BlackRock, was on this evening's PBS News Hour. It's just a few minutes but definitely worth watching:

https://www.pbs.org/newshour/show/why-c ... al-markets
IMO this is not about just ESG funds.

BlackRock has large voting rights in all companies, they can use that to leverage changes in the companies. They should, if a majority of their Fund holders want them to.
"Equity markets could get worse if the slowdown extends further, but also realize that the markets will rebound far before economic data improve."

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JoMoney
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Re: BlackRock's New Position on Climate Change

Post by JoMoney » Fri Jan 17, 2020 11:10 pm

CyberBob wrote:
Fri Jan 17, 2020 10:56 pm
I never noticed the funds before, but it looks like you can do an ESG indexed 3-fund portfolio at Fidelity too.

Fidelity US Sustainability Index Fund ( FITLX )
Fidelity International Sustainability Index Fund ( FNIDX )
Fidelity Sustainability Bond Index Fund ( FNDSX )
Yes, you can do ESG investing all over with many firms, but BlackRock seems to be trying to market it as part of the story of their brand.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

CommitmentDevice
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Re: BlackRock's New Position on Climate Change

Post by CommitmentDevice » Fri Jan 17, 2020 11:11 pm

BlackRock believes markets are under appreciating risks associated with climate change. My wife, a researcher who closely follows the science, tells me the same thing.
...this is one of the reasons why I’m happy with my ESG 3-Fund portfolio. (viewtopic.php?t=291868)

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TimeRunner
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Re: BlackRock's New Position on Climate Change

Post by TimeRunner » Fri Jan 17, 2020 11:13 pm

91 year old Mom is also big into Vanguard ESG funds. She might not be leaving the World a better place than she found it, but she feels better about ESG investing. Fine with me. :beer
One cannot enlighten the unconscious.

bhsince87
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Re: BlackRock's New Position on Climate Change

Post by bhsince87 » Fri Jan 17, 2020 11:13 pm

This is textbook active investing.

All historic data says it's a bad idea.

Not a Boglehead approach. But that's what makes the markets go round.
"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace." Samuel Adams

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Mel Lindauer
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Re: BlackRock's New Position on Climate Change

Post by Mel Lindauer » Fri Jan 17, 2020 11:15 pm

This thread is locked (climate change.)
Best Regards - Mel | | Semper Fi

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ThereAreNoGurus
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Re: BlackRock's New Position on Climate Change

Post by ThereAreNoGurus » Fri Jan 17, 2020 11:48 pm

Mel Lindauer wrote:
Fri Jan 17, 2020 11:15 pm
This thread is locked (climate change.)
You sure about that (that it's locked)? :D
Trade the news and you will lose.

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oldcomputerguy
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Re: BlackRock's New Position on Climate Change

Post by oldcomputerguy » Fri Jan 17, 2020 11:59 pm

It is now. :wink:
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

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