ESG Funds Outperform
With Sustainable Responsible Investing
Most of us, even if we have turned off our news notifications to avoid an overload of depressing Coronavirus updates, know that the market has taken a significant downturn in the past 10 weeks. There is already a Wikipedia page for “2020 stock market crash” - and we’re not out of the woods yet.
For many Millennials, the Covid-19 pandemic has led to sweeping job losses. On Thursday, the US reached a staggering 22 million unemployed citizens. Many Millennials are having PTSD recall to the 2008 financial crisis, from which they only just started to recover. In many countries around the world, the Coronavirus outbreak turned the normalcy of daily routine on its head literally overnight, changing everything from daily workout habits to the way people are having happy hours.
But what has not changed is Millennials’ unwavering value in investing in companies who can walk the talk on corporate social responsibility. In fact, right now there is a stronger sense than ever in the importance that Millennials place on sustainable investing. In times like these, where we are collectively at the mercy of a volatile economy, Millennials place a high value on backing companies they trust, and who they feel are taking care of their communities. Nigel Green, CEO of financial advisory deVerde Group, elaborates that the Coronavirus “has underscored the complexity and interconnectedness of our world in terms of demand and supply, in trade and commerce – and how these can be under threat if not sustainable.”
A global health pandemic is showing us all that we have to take care of each other - and that extends into the financial playing field. “From a moral and societal perspective, the coronavirus pandemic has highlighted to many people how we are all in this together,” says Samantha Azzarello, global market strategist at J.P. Morgan Asset Management. “How companies are built to respond to the crisis and support customers, employees and communities at large is very front and center right now.”
And according to Morningstar, sustainable funds with strong environmental, social and corporate governance (ESG) principles outperformed conventional funds in the first quarter of 2020. At Vinito Capital Management, our fine wine and vineyard funds performed on par with other ESG funds. All our funds have continued to grow consistently and rapidly, even when all of the world indexes are down a solid double digit from the beginning of the year. John Hale, Morningstar’s head of sustainability research says, “It’s very simple, really — companies truly focused on the well-being of their workers and customers are able to make the right decisions more quickly in a major crisis like this one.”
At VCM & VINX, we’re proud to be a part of this conversation. We don’t believe that making high returns on wine and vineyard investing is mutually exclusive of ESG principles. Our investment management strategy has always been about doing the right thing for our customers, our partners, our employees, and our planet. We’re lowering the barrier to entry on what has typically been an investment market for the wealthy by lowering buy-in costs, operating on trade platforms with secure open source crowdsale and investor voting rights, and saying yes to many different forms of payment. Our vineyard in Burgundy, Vini Sileo, is managed with 100% organic viticulture because we know that it’s just the right way to farm. We have also gone an extra step in the village Vini Sileo is located by helping the church construct a new roof.
We have also recently launched our VINX coin, a cryptocurrency Security Token Offering (STO), on the Saturn Network & Bitcratic, Ethereum exchange markets. The benefits of the Saturn Network are that it operates as a decentralized autonomous organization; investors become a part of the development team and govern the network’s protocol. There are zero withdrawal fees, and trading fees collected are shared among Saturn token holders. There’s no better corporate governance than the kind that puts itself in the hands of investors.
CEO Erick Sabelskjold comments, “Everything we do is managed by real humans who have families and loved ones to support. We understand what it’s like to save for retirement and put money into our kids’ college funds, and we manage your money with that in mind. For us, being a socially responsible company is not a tagline for a one-off Tweet or Instagram post. This is a commitment upon which we built this company and it will remain long after the Coronavirus pandemic settles.”
Stay safe, and in the meantime, we’d love to hear from you!