Insights

by Guillaume Detrait, President & Chief Risk Officer [email protected] For more than 2 years, Welton has been engaged in the process of preparing our ESG Advantage strategy to comply with the global regulatory and reporting frameworks including SFDR and UNPRI, two of the most advanced frameworks that are shaping the sustainability agenda in the investment space. Now that we are close to the end of this process, I wanted to share some thoughts on why we have been so committed to this endeavor. It is our view that the regulation of ESG strategies to prevent greenwashing – a term that...

The first quarter of 2022 threw a daunting number of curves at investors. The confluence of higher inflation brought about, in part, by the lengthy pandemic, the Russian war with Ukraine and the January tech meltdown producing a sharp spike in market volatility. Markets took a beating, and ESG stocks were no exception. In its wake, there is a good amount of hand-wringing among ESG supporters and finger-pointing from others about the limitations of ESG investing. Reflecting back on the quarter I’d like to point out two factors that may have contributed to this circumstance, and how Welton ESG Advantage’s...

“It is not in the stars to hold our destiny but in ourselves.” ― William Shakespeare My ESG journey began with Welton about two years ago, but sustainability is deeply rooted in me by virtue of my unique upbringing. My father is a true visionary, and I recognized that at a very young age. I like to think that behind all my micro-decisions was this intention to take a page out of his book. Although I come from a conventional Indian family based in a small town, my parents have always been standouts. When I was about 10, my father...

Not long ago commodity prices were falling, now they’re surging. Today, I see green across every quote in every commodity sector from my front-row seat managing the trade flow for $7B in Macro positions. At the start of the pandemic-induced global shutdown in 2020, we witnessed dramatically falling commodity prices as uncertainty soared, sending assets downward in a risk-off environment. Conversely, we now see commodity prices rocketing to multi-year highs as we enter yet another risk-off environment. Energy is at multi-year highs, industrial metals highest in a decade, and markets like wheat are limit up for several days running. What...

Regrettably, only a fraction of published medical research is reproducible by other investigators. This is no surprise to those of us who contribute or follow medical advancements. Hundreds of reviews have documented tens of thousands of examples. From cancer biology to clinical treatment tools to any study involving survey techniques and more, only a fraction of research will stand the test of time by proving true in others’ hands. Investors face a similar challenge. This article from Bloomberg, “The Finance Research Crisis is All Too Real,”  highlights the same pattern in financial research. Though causality varies, the net result is...

How might an investor protect themselves from the recent inflationary spike? How might they rationally act as the news is worsening? From a macroeconomic investor perspective, I offer caution in reacting to the news. The crescendo of news transmits multiple signals. Carrying both information and urgency, the news feeds behavioral tendencies. Investors can easily be lured into actions driven by the urgency, ultimately losing the return advantage embedded in the information. Short-term inflation is no doubt a problem. The massive shift in consumer preferences from services to goods simultaneous with global liquidity injections has snarled the supply side. Disruptions and...

We’ve all seen it in the headlines this year or experienced it firsthand. No. Not the pandemic. The other major pressing problem affecting the entire planet – climate change. Raging forest fires, droughts around the entire west of the US, major floods in Europe, power outages in Texas due to unusually severe cold weather. The list goes on and on. This November, world leaders, business leaders, diplomats, scientists and a bevy of negotiators will be gathering in Glasgow for COP26, the annual United Nations conference to develop a framework to combat climate change. The main goal of the two-week affair...

In my role as an ESG Data Analyst and Trader at an investment management firm, I spend a good part of each day grappling with how to successfully integrate ESG factors into our ESG program, a multi-asset ESG long/short strategy combining ESG US mid-large cap equities and ESG global derivatives. One of the challenges for the investment industry as a whole in developing sustainable investment approaches has been finding ways to meet the demand for more sophisticated ESG products that address some of society’s biggest environmental, social and governance challenges as well as meet the risk / return objectives of...

Human versus machine. Which is superior? It’s a centuries-old question that continues to fascinate us. Regrettably, for investors, it often fascinates to the point of distraction. But, investors are only human. And when investors are both the questioner and a stakeholder in the answer, they cannot seem to turn away. Whether in higher-order games like chess, low complexity industrial automation, or admixture processes such as legal discovery, investors diligently follow the inroads of sophisticated software advances. The potential impacts upon them are too significant to ignore. For investors, however, there is a logical progression of their diligence and curiosity. Self-reflection...

by Guillaume Detrait, President & Chief Risk Officer [email protected] During my 13-year tenure at Welton, I’ve overseen periods of growth, change, and the 2020 Covid pandemic crisis. And while each of these periods brought its own unique challenges, one organizational framework has recently helped us weather them all. That framework is known as Objectives and Key Results, or OKRs for short. I want to share our continuing experience to benefit those less familiar and to stimulate discussion with experienced OKR managers to advance learning for us all. Management By Objective (MBO) – Where we began Beginning in 2010, we formalized...
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