ESG & Impact Investing   |   Feb 20, 2020

Impact Investing: A Third Factor to the Risk/Return Mindset

Traditionally, risk and return are the two most important considerations in the realm of investment management. Modern Portfolio Theory hypothesizes that investors can construct optimal – or “efficient” – portfolios which maximize expected returns by taking on a quantifiable and specific amount of risk. More than sixty-five years after it was first proposed, it continues to be the gold standard for portfolio construction.

Efficiency, however, is in the eye of the beholder. Today’s investors have become sensitive to a third factor: impact. Simply put, investors are demanding that their investments provide more than just a financial benefit, but a societal one as well. At Fiera Capital Corporation, we strive to put together investment solutions that reflect our clients’ intended risk/return objectives, while staying true to their values.

Defining Responsible and Impact Investing

The world of responsible investing (RI) is full of acronyms and terms that lack consensual definitions. To set the foundation for any meaningful dialogue on the subject, Fiera Capital has developed its own Responsible Investing Spectrum, which helps simplify decisions for clients by mapping their impact objective: from environmental, social and governance (ESG) integration (strategies that are adequately compensated for the amount of ESG related risk they assume) to impact only (strategies with intentional and measurable impact objectives like sustainable agriculture, renewable energy, microfinance or affordable basic services).

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Disclosures

Important Disclosure

Fiera Capital Corporation is a global asset management firm with affiliates in various jurisdictions (collectively, “Fiera Capital”). The information and opinions expressed herein relate to Fiera Capital’s investment advisory services and investment funds and are provided for informational purposes only. It is subject to change and should not be relied upon as the basis of any investment or disposition decisions. While not exhaustive in nature, these Important Disclosures provide important information about Fiera Capital and its services and are intended to be read and understood in association with all materials available on Fiera Capital’s websites.

Past performance is no guarantee of future results. All investments pose the risk of loss and there is no guarantee that any of the benefits expressed herein will be achieved or realized. Valuations and returns are computed and stated in Canadian dollars, unless otherwise noted. The information provided herein does not constitute investment advice and should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell any security or other financial instrument. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. There is no representation or warranty as to the current accuracy of, or responsibility for, decisions based on such information. Any opinions expressed herein reflect a judgment at the date of publication and are subject to change. Although statements of fact and data contained in this presentation have been obtained from, and are based upon, sources that Fiera Capital believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed. No liability will be accepted for any direct, indirect, incidental or consequential loss or damage of any kind arising out of the use of all or any of this material.

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