FINSUM + Magnifi: Water Crisis Give New Dimension to ESG
April 6, 2021
Two extreme water crises have occurred since the new year and are moving water conservation to the top of the ESG pecking order. Access to clean water during Texas blackouts was a major concern and on the other side of the globe, Taiwan is experiencing a historic drought, detrimental to its semiconductor industry. Most ESG opportunities are centered around greenhouse gas emission, however nine of the ten greatest risk factors for humanity are linked to the water crisis. Many companies couldn’t survive without ample water. The Thomas Schuman Capital U.S. Water Security Index gives its weight to the largest 550 companies by their water footprints and risk exposure. Companies like AT&T or Microsoft are given higher weights. The TSC has outpaced the S&P 500 by over 14% since its inception. The Invesco Water Resources ETF directly invests in purification and conservation companies and has also outpaced the S&P.
FINSUM + Magnifi: Goldman Sachs Bullish on Commodities Market
(March 2021)
Jeffrey Currie, head of Commodities Research at Goldman Sachs, said there is the beginning of a structural bull market in raw materials. The main reason behind this push is a variety of policies that are driving demand. The U.S. and Europe’s supply chains have been in a rut due to the pandemic, but governments are looking to change how they interact with the economy post-pandemic. The U.S. and China are looking to retool their supply chains in a variety of industries. This policy-focused push is creating micro-price pressures in industries. The supply can’t keep up currently, so as the dollar continues to weaken amid inflationary pressures commodities like oil offer an outlet to hedge the macro factors. Crude oil, copper, and Natural Gas are all up in 2021.
Read more
FINSUM + Magnifi: Why Gold is a Good Bet Right Now
(October 2020)
Gold is looking like a good bet right now. The metal has had a very strong year after almost a decade of lagging, and it is no surprise—global calamities are the perfect environment for gold appreciation. But we are clearly past the initial panic of the pandemic, so what is the current case for the shiny metal? The answer is that the roadmap looks very positive. Two tailwinds appear to be in place, one in the short-term, the other in the medium- to long-term. Firstly, the election is likely to cause a great deal of uncertainty and volatility which gold will probably benefit from. Secondly, as a new stimulus package draws nearer, the credit quality of US Treasuries is causing some anxiety. Gold has been rising alongside this fear, with a 1.8% gain yesterday as investors increasingly believed a stimulus package would be passed.