For institutional investors wishing to integrate their strategic views on climate change into their portfolios, State Street Global Advisors offers both alpha- and beta-oriented solutions.
The State Street Global Climate Transition strategy is a concentrated, high-conviction approach that seeks to generate alpha by selecting securities based on our analysts’ proprietary and forward-looking climate transition scores. The objective is to select companies that are climate-transition leaders and influencers in their respective industries. We believe the high-conviction nature of the Global Climate Transition strategy makes it suitable for use as a satellite in core-satellite portfolio construction.
The State Street Sustainable Climate World Equity strategy is much broader and is fully rules-based, with climate change parameters that are more historically focussed.
The two strategies are highly complementary in terms of investment style and conviction. They:
Fit well together in terms of a strategic allocation which takes climate change into consideration
Fit well together in terms of core-satellite portfolio construction
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The views expressed in this material are the views of Fundamental Growth & Core Equity through the period ended September 11, 2022 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. There is no representation nor warranty that such statements are guarantees of any future performance. Actual results or developments may differ materially from the views expressed.
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Quantitative investing assumes that future performance of a security relative to other securities may be predicted based on historical economic and financial factors, however, any errors in a model used might not be detected until the fund has sustained a loss or reduced performance related to such errors.
SSGA uses quantitative models in an effort to enhance returns and manage risk. While SSGA expects these models to perform as expected, deviation between the forecasts and the actual events can result in either no advantage or in results opposite to those desired by SSGA. In particular, these models may draw from unique historical data that may not predict future trades or market performance adequately. There can be no assurance that the models will behave as expected in all market conditions. In addition, computer programming used to create quantitative models, or the data on which such models operate, might contain one or more errors. Such errors might never be detected, or might be detected only after the Portfolio has sustained a loss (or reduced performance) related to such errors. Availability of third-party models could be reduced or eliminated in the future.
The returns on a portfolio of securities which exclude companies that do not meet the portfolio’s specified ESG criteria may trail the returns on a portfolio of securities which include such companies.
A portfolio’s ESG criteria may result in the portfolio investing in industry sectors or securities which underperform the market as a whole.
Responsible-Factor (R Factor) scoring is designed by State Street to reflect certain ESG characteristics and does not represent investment performance. Results generated out of the scoring model is based on sustainability and corporate governance dimensions of a scored entity.
This information is for informational purposes only, not to be construed as investment advice or a recommendation or offer to buy or sell any security. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund. Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors. SSGA does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investing entails risks and there can be no assurance that SSGA will achieve profits or avoid incurring losses.
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, so you may have a gain or loss when shares are sold. Current performance may be higher or lower than that quoted.
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