RESPONSIBLE INVESTING
A growing interest
Investors today are demanding more. It’s no longer just about the returns they generate. It’s also about the good their money can do. They want to live in a sustainable world, one where responsible investing embraces assets that consider their values and account for a much bigger picture.
That's why it's no surprise that by 2025, environmental, social, and governance (ESG) funds are expected to comprise half of all professionally managed investments.
The Investor First approach
The responsible investing strategies we offer must adhere to our Investor First process, which includes the four steps Zetafunds Asset Management, Inc., uses to screen money managers.
Quantitative analysis
We apply quantitative metrics to identify strategies delivering competitive returns, style consistency, and sound risk mitigation.
Qualitative analysis
With a forward-looking approach, we analyze the manager's investment philosophy, portfolio construction process, organizational structure, and responsible investing process.
Investment manager recommendation
Through an objective, evidence-based, and collaborative process, these quantitative and qualitative analyses are combined to form a recommendation that is vetted by our Investment and Investment Risk committees.
Continuous monitoring
Fund managers are continuously monitored on a daily, weekly, monthly, and quarterly basis for investment performance, adherence to style and responsible investing framework, compliance with objectives, and other important criteria. Managers not meeting expectations are subject to replacement.
The four categories
Responsible investment strategies seek to construct portfolios that emphasize ESG considerations. We segment these strategies into four primary categories.
Zetafunds's diversified fund lineup can help tailor portfolios to meet specific goals.
Exclusionary (SRI)*
Screening is used to avoid certain sectors, companies, or practices, prohibiting the investment in issuers that violate ethical standards or involve controversial products or practices. For example, a tobacco company would be excluded from consideration. *Socially Responsible Investing (SRI)*
Best-in-class ESG
Emphasizes issuers with improving ESG profiles. Candidates must meet ESG and economic thresholds, but we are specifically looking at companies within individual sectors who are mitigating ESG risks and/or revising their business practices. Not all companies within a sector are created equal and excluding entire sectors from consideration is not viable. For example, within energy, some natural gas producers will have better ESG profiles relative to oil companies.
Sustainability-themed
Seeks to align portfolios with long-term sustainable secular trends by investing in issuers that positively contribute to solving sustainability problems, such as climate change adaptation. Products could be smart meters that optimize electricity demand; services could be recycling that reduces adverse environmental impact. It avoids investments that are detrimental to the long-term sustainability of the planet and its people.
Impact investments
Investments that are intended to generate positive, measurable social and environmental impact while also seeking financial returns. Impact strategies invest in issuers for specific projected impact, and measure performance relative to impact goals. Examples include assets such as affordable housing mortgage loans.
Zetafunds Responsible Investing Funds
Designed to contribute to a more sustainable future while seeking to generate favorable long-term returns.
Zetafunds Sustainable Equity Income
Seeks total return gained from the combination of dividend yield, growth of dividends and capital appreciation.
Zetafunds High Yield ESG
Seeks a high level of current income.
Zetafunds Sustainable Bond
Seeks to provide high total return through a combination of current income and capital appreciation.
Helping you invest with confidence
Putting the Investor First℠ is more than just our process. It’s our pledge to provide investors with strategies that inspire confidence in their financial future. It means giving them the tools they need to live life on their terms.
Putting the Investor First
No single investment firm is the best at managing every asset class. That's why we take a diversified approach that applies the experience of best-in-class portfolio managers throughout the industry to offer a full range of investment strategies. This philosophy made us a pioneer in the sub-advised mutual fund industry. Simply put, we know how to select and monitor a diverse array of managers to seek better results.
The Investor First Methodology
Success doesn’t happen by accident. Each portfolio manager must meet the rigorous standards required by our Investor First process, which includes the following four steps:
1. Quantitative Analysis
We look at the numbers to identify strategies that strive to deliver strong, risk-adjusted returns, style consistency, and reduced risk.
2. Qualitative Analysis
We examine important factors, such as a manager’s investment philosophy, portfolio construction process, organizational structure, and risk management. This means going beyond hard numbers to truly understand the context that leads to the outcomes.
3. Investment Manager Recommendation
We combine our quantitative and qualitative analyses with an objective, collaborative process to recommend an investment manager. Our Investment and Investment Risk committees vet each manager we choose.
4. Continuous Monitoring
We continuously monitor the fund managers we select. Each day, week, month, and quarter, we assess their investment performance, adherence to style, portfolio volatility, and active share. When managers do not meet expectations, they may be replaced.
