WEBVTT - Examining Tech, Markets, And ESG Investing

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<v Speaker 1>Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside

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<v Speaker 1>my co host Matt Miller. Every business day, we bring

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<v Speaker 1>you interviews from CEOs, market pros, and Bloomberg experts, along

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<v Speaker 1>with essential market moving news. Find the Bloomberg Markets Podcast

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<v Speaker 1>on Apple Podcasts or wherever you listen to podcasts, and

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<v Speaker 1>at Bloomberg dot com slash podcast. I want to get

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<v Speaker 1>some good tech ideas for two and so I said, hey,

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<v Speaker 1>let's get Dan ives On. Um, I'm sure he's, you know, somewhere,

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<v Speaker 1>it's either skiing or on the beach somewhere, but we're

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<v Speaker 1>here hard at work. But maybe we can get Dan

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<v Speaker 1>ives On. He's the yes, senior tech analyst for web Bush.

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<v Speaker 1>He's been doing us for a long time. Dan, thanks

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<v Speaker 1>so much for taking a time here, my friend. What

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<v Speaker 1>are your best ideas that you're talking to your clients

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<v Speaker 1>about right now? Yeah, And I think there's obviously some

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<v Speaker 1>nervousness or divisiveness in terms of where tex Head and

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<v Speaker 1>I think some of the themes, regardless what happens with

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<v Speaker 1>the ten years said they're going to continue to I

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<v Speaker 1>think the massive I mean one Apple and we talked

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<v Speaker 1>about Apple glass today and we be that that comes

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<v Speaker 1>out in two thousand twenty two, along with what's the

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<v Speaker 1>supercycle playing out? Despite the chip short, I think apples

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<v Speaker 1>anywhere between the three to three and a half trillion

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<v Speaker 1>dollar mark cap two tho, so that continues to being

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<v Speaker 1>where the top your names in the large cap along

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<v Speaker 1>with Microsoft is our favorite cloud play, and then we

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<v Speaker 1>love cyber security names like z Scale or Cannibal, cyber

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<v Speaker 1>Arc or some of our fevers. I think those are

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<v Speaker 1>the themes. And then just to put a bow around it,

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<v Speaker 1>electric vehicles Tesla, followed by our supply chain play which

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<v Speaker 1>is life Cycle and e V. There's sure top picks

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<v Speaker 1>this week going to next year. So a lot of

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<v Speaker 1>those are huge. Obviously, Apple is a two point eight

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<v Speaker 1>trillion dollar company and change Microsoft is worth more than

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<v Speaker 1>two and a half trillion dollar. Ears. Um, let me

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<v Speaker 1>pull up Tesla or what's Tesla looking at right now?

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<v Speaker 1>Like billion Tesla? Wow, one point zero four trillion, so

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<v Speaker 1>they're massive. Um, what do you think about the competitors?

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<v Speaker 1>What do you think about ribby in and Lucid and

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<v Speaker 1>the Bollinger and all of these you know haven't yet

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<v Speaker 1>sold a lot of products. Competitors, Well, I think Ribby

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<v Speaker 1>In is the one along with Ford and GM, you

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<v Speaker 1>know which I think a reratings. I think Ribbyan is

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<v Speaker 1>the real deal. I think now it's obviously to be

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<v Speaker 1>coming out of the box that's been given a high evaluation,

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<v Speaker 1>but in my opinion, and a tough climate right with

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<v Speaker 1>no chips. Well, but but as me and you and

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<v Speaker 1>the team have talked about, I'm not looking at the

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<v Speaker 1>next six twelve months. When I look at the next

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<v Speaker 1>three four to five years, Ribby and I think a

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<v Speaker 1>category changer in terms of pickup trucks and stvs, in

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<v Speaker 1>terms of what are Jane the team have done in

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<v Speaker 1>the vertically integrated front, and really it's the it's the

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<v Speaker 1>only company that's come out on e VS vertically integrated

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<v Speaker 1>that now you could put in the same potential breadth

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<v Speaker 1>as Tessa if they execute over the next years. If

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<v Speaker 1>that happens, then we're looking at the two to three

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<v Speaker 1>hundred billion dollar market for a name that you know today.

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<v Speaker 1>I think it's just still in the early days of

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<v Speaker 1>building this out. Hey, Dan, I'm sure your institutional investor

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<v Speaker 1>clients are asking you, how does tesla Um fit into

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<v Speaker 1>a more competitive EV market over the next several years.

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<v Speaker 1>What's your response? So I don't view it as a

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<v Speaker 1>zero sum game. It's not Tessa or because Tessa is

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<v Speaker 1>going to continue dominating evs. My view is it's a

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<v Speaker 1>five trillion dollar greing tide away. Two and a half

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<v Speaker 1>trillion of that is Tesla's in terms of where that

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<v Speaker 1>market heading, especially with more and more compe pacity coming

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<v Speaker 1>on with you look at Brewin in Austin. Those are

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<v Speaker 1>significant protesting at two million vehicles per year, but when

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<v Speaker 1>you look over all the v s, it's still three automobiles.

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<v Speaker 1>That's why I think you're going to see more and

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<v Speaker 1>more the Fords of gm US and others benefits. All right, Dan, Hey, um,

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<v Speaker 1>we're gonna let you go at that moment. We'll touch

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<v Speaker 1>base with you soon. Dan, i'ves web Bush Security Senior Technology.

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<v Speaker 1>Let's bring in Ian Lyndon. He's a managing director and

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<v Speaker 1>head of US rate strategy at Femail Capital Markets. UM

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<v Speaker 1>in great to get you on the program. I just

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<v Speaker 1>want to quickly get the auction my auction questions out

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<v Speaker 1>of the way. First, we have another auction today, thirty

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<v Speaker 1>year auctions that I think one o'clock. We get the

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<v Speaker 1>headlines yesterday, we had the ten year, I think the

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<v Speaker 1>three year the day before, and people are paying more

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<v Speaker 1>and more attention ever since seven year auction went off

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<v Speaker 1>the rails if months back, how do you think they're

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<v Speaker 1>doing well? I think that's a great question. I think

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<v Speaker 1>we need to look at it in two ways. First,

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<v Speaker 1>we have seen more of a concession at auction, so

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<v Speaker 1>the auctions have been tailing more than they had previously,

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<v Speaker 1>but the bitter composition has been more typical than the

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<v Speaker 1>headlines would have suggested. More importantly, it's very difficult to

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<v Speaker 1>argue that there's not sponsorship for US treasuries when ten

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<v Speaker 1>year yields are below one fifty and thirty year yields

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<v Speaker 1>are below two percent. So while there might need to

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<v Speaker 1>be greater moments of concession, particularly on the curve, to

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<v Speaker 1>take down these incrementally um smaller than they were auction sizes,

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<v Speaker 1>I think the fact of the matter is that there's

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<v Speaker 1>plenty of end user demand for treasury products at this point. Alright, So, Ian,

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<v Speaker 1>I've got a federal reserve, you know, pulling back on

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<v Speaker 1>the tapering, maybe even faster than initially thought. Rate increases,

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<v Speaker 1>next year, rate increases in But then I looked down

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<v Speaker 1>in my tenure and I'm stuck at one point four

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<v Speaker 1>eight percent. Should I be surprised that that shouldn't be higher? Well,

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<v Speaker 1>if we didn't believe the FED had the tools and

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<v Speaker 1>the willingness to combat inflation in the long run and weren't,

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<v Speaker 1>and the FED wasn't able to keep inflation expectations anchored

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<v Speaker 1>in that situation, one should expect that the curve would

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<v Speaker 1>be steeper and ten and thirty year yields would be higher.

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<v Speaker 1>I'm certainly sympathetic to the idea that on an outright basis,

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<v Speaker 1>ten year yields below one fifty contain a fair amount

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<v Speaker 1>of sticker shock, and I think part of that has

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<v Speaker 1>to do with the assumption, which has been proven to

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<v Speaker 1>be um tricky at this point in the cycle, that

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<v Speaker 1>longer end treasury yields tins and thirties should be a

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<v Speaker 1>function of US growth and inflation fundamentals. The reality is

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<v Speaker 1>that long che treasuries are a function of global growth

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<v Speaker 1>and inflation fundamentals. And so while the US might be

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<v Speaker 1>recovering well from the pandemic, we're seeing high inflation numbers,

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<v Speaker 1>we're seeing continued growth. The reality is that there are

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<v Speaker 1>different pockets in different regions in the world who are

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<v Speaker 1>recovering at a much slower pace, and that adds to

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<v Speaker 1>the structural demand that we continue to see for treasures.

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<v Speaker 1>All right, so what do you think we're gonna see

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<v Speaker 1>in two with all of those variables? I note that

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<v Speaker 1>you were ranked first in the two thousand eighteen Institutional

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<v Speaker 1>Investors survey for US rate strategists, strategists and technical analysts.

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<v Speaker 1>Big deal. Yeah, well appreciate that one to Yale. So

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<v Speaker 1>that's also pretty pretty smart. I think, Um, what do

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<v Speaker 1>you think we're gonna see? I mean, is are we

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<v Speaker 1>still going to see inflation coming back down to normal

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<v Speaker 1>levels in the middle of next year? Are we gonna

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<v Speaker 1>see rate increases in the second half? Are we going

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<v Speaker 1>to see the actual rates numbers normal? Lies? So I

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<v Speaker 1>think that we are going to see the base effects

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<v Speaker 1>in Q two two become relevant because the upside that

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<v Speaker 1>we saw, the bulk of the upside in the realized

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<v Speaker 1>inflation was in the second quarter of this year. It

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<v Speaker 1>was driven by new and used auto prices. It was

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<v Speaker 1>driven by airfares as well as oh we are or

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<v Speaker 1>rents and shelter costs that materially raises the bar for

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<v Speaker 1>Q two of next year for the pace of inflation

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<v Speaker 1>to accelerate. So my baseline assumption is that while there

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<v Speaker 1>will continue to be a fair amount of inflation the system,

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<v Speaker 1>the shock of the headline year over year figures will

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<v Speaker 1>start to moderate. I do think we get to rate

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<v Speaker 1>hikes in twenty two and the bigger risk, and I

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<v Speaker 1>think that this is really important when we think about

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<v Speaker 1>the way that the rates market plays out. The bigger

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<v Speaker 1>risk is what does the market ultimately believe the terminal

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<v Speaker 1>rate for this cycle is want to be. The FETE

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<v Speaker 1>has told us that they expected all else to be

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<v Speaker 1>equal to be two and a half. Now, if we

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<v Speaker 1>think about the last cycle we struggled to get We

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<v Speaker 1>got to two and a half, but we had to

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<v Speaker 1>quickly reduce to one seventy five. So there are two

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<v Speaker 1>camps at the moment, the lower terminal and the higher

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<v Speaker 1>terminal camps that are going to drive the debate and

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<v Speaker 1>that will dictate where the five year sector goes at

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<v Speaker 1>the beginning of next year. So we're leaning more bearishly

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<v Speaker 1>on the treasury market than we have in the past

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<v Speaker 1>with the five years sector poised to underperform, and so

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<v Speaker 1>that means that five thirties will continue to flatten. Five

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<v Speaker 1>tins will flatten as well. But all of this within

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<v Speaker 1>the context of a higher overall rate range. So I

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<v Speaker 1>could easily see ten year yields touching two next year

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<v Speaker 1>in the first half thirty year yields back above to fifty.

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<v Speaker 1>And this has to do with the fact that the

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<v Speaker 1>economy is growing and that the labor market is improving

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<v Speaker 1>and inflation is back in the system. Hey, and there

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<v Speaker 1>was an argument, you know, over the last several months

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<v Speaker 1>that perhaps the FED was falling behind the market, falling

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<v Speaker 1>behind perhaps other central banks. Did they allay those concerns

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<v Speaker 1>by that pivot we saw, you know, a week or

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<v Speaker 1>two ago in terms of the tapering in the rate conversation,

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<v Speaker 1>they certainly did seem to come in line with what

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<v Speaker 1>we're seeing with other major central banks. I will off

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<v Speaker 1>the caveat though, that the other central banks that were

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<v Speaker 1>a bit more hawkish were ones that had different exposures

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<v Speaker 1>to energy prices. So the Reserve Bank of Australia, the

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<v Speaker 1>Bank of Canada, for example, higher energy prices have decidedly

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<v Speaker 1>different ramifications for those economies than what we see here

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<v Speaker 1>in the US. And then the Bank of England has

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<v Speaker 1>a different relationship with imported inflation prices as well or

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<v Speaker 1>imported costs, just because of the nature of their economy.

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<v Speaker 1>So while it made sense to see coordination in terms

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<v Speaker 1>of central banking banking moves at the beginning of the

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<v Speaker 1>pandemic when we were all responding to the uncertainties associated

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<v Speaker 1>with the coronavirus, on the way out, we shouldn't actually

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<v Speaker 1>be expecting in the same degree of coordination because each

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<v Speaker 1>economy is performing differently and responding to some of the

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<v Speaker 1>pandemic dislocations in a different manner. All that said, I

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<v Speaker 1>do think that the that that power made it very

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<v Speaker 1>clear that the hawkish pivot is going and has come

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<v Speaker 1>to fruition. We're going to see an acceleration of tapering

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<v Speaker 1>next week and that will set up the FED to

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<v Speaker 1>have more flexibility in when and how they choose to

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<v Speaker 1>normal normalize policy rates next year. When when you look

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<v Speaker 1>at the economy and the economic growth as it's affected

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<v Speaker 1>by rates, clearly monetary policy is still loose even if

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<v Speaker 1>they're tightening um When does it start to affect When

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<v Speaker 1>do we start to see um uh financial conditions really

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<v Speaker 1>get tighter because of higher rates? Since I don't think,

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<v Speaker 1>you know, two or three rate hikes from zero is

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<v Speaker 1>that much. So if you decompose the if you break

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<v Speaker 1>down the financial condition index, what we actually see is

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<v Speaker 1>over the last decade decade and a half, the biggest

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<v Speaker 1>driver has been the has been equity volatility and to

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<v Speaker 1>some extent, the dollar. And so if we see a

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<v Speaker 1>run up and equity volatility, which only occurs when stock

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<v Speaker 1>sell off, that in and of itself will tighten financial conditions.

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<v Speaker 1>And that gets us back to the Powell put that

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<v Speaker 1>has been talked about a great length and certainly still exists.

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<v Speaker 1>So I'm less concerned about the incremental rate hikes per

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<v Speaker 1>se and how they translate through to financial conditions, and

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<v Speaker 1>I'm more worried about whether or not record or near

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<v Speaker 1>record high equity price is are able to absorb a

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<v Speaker 1>FED that has gone from being, as you point out,

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<v Speaker 1>extremely accommodative to moving forward with a slightly tighter policy stance.

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<v Speaker 1>And but you think the power put is still there, Yes,

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<v Speaker 1>I do think the power put is there, but it's

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<v Speaker 1>not an outright number. It doesn't matter. So let's put

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<v Speaker 1>it this way. If the uh SMP five ended next

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<v Speaker 1>year off, that wouldn't trigger a FED response. But if

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<v Speaker 1>the SMP dropped ten or fift over the course of

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<v Speaker 1>two days or three days, that's that's the spike of

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<v Speaker 1>volatility that didn't gets the set involved. So it isn't

0:13:40.840 --> 0:13:43.439
<v Speaker 1>an outlete number as much as it is the trajectory,

0:13:43.480 --> 0:13:46.520
<v Speaker 1>and that's going to be I think an important background

0:13:46.520 --> 0:13:50.280
<v Speaker 1>story for in Lyin. Thank you so much for joining us.

0:13:50.320 --> 0:13:52.839
<v Speaker 1>Really appreciate getting your thoughts in Lngin, Managing director in

0:13:52.880 --> 0:13:56.520
<v Speaker 1>head of US rate Strategy at BEMO Capital Markets Fixed

0:13:56.600 --> 0:14:03.640
<v Speaker 1>Income Strategy Team. Let's get back to the plane vanilla

0:14:03.679 --> 0:14:05.920
<v Speaker 1>market in a way, although really I want to talk

0:14:06.440 --> 0:14:09.120
<v Speaker 1>about E t F strategies. Ross Klein as the founder

0:14:09.120 --> 0:14:13.319
<v Speaker 1>and chief investment officer at change Bridge Capital, he manages

0:14:14.000 --> 0:14:18.120
<v Speaker 1>E t F strategy sustainable and long short UM at

0:14:18.200 --> 0:14:21.040
<v Speaker 1>Ross tell us first of all about the UHUM, the

0:14:21.120 --> 0:14:24.440
<v Speaker 1>sustainable portion of that it's become. It was a fad

0:14:24.480 --> 0:14:26.840
<v Speaker 1>that seems to have become now really a strategy that

0:14:26.920 --> 0:14:30.080
<v Speaker 1>you can't ignore. What do you how do you? How

0:14:30.080 --> 0:14:33.760
<v Speaker 1>do you execute that? Yeah, Hey, Paul, hey Matt, thanks

0:14:33.760 --> 0:14:37.600
<v Speaker 1>for the time today. Um change Bridge manages uh C

0:14:37.880 --> 0:14:42.000
<v Speaker 1>B s e change Bridge Capital Sustainable Equity e t F.

0:14:43.040 --> 0:14:47.640
<v Speaker 1>Our approach to E s G investing is neither exclusionary

0:14:47.720 --> 0:14:52.720
<v Speaker 1>nor passive. Uh. We believe E s G investing is

0:14:52.800 --> 0:14:56.520
<v Speaker 1>highly nuanced and requires a lot of analysis from active

0:14:56.680 --> 0:15:02.280
<v Speaker 1>portfolio managers. We manage thirty to forty securities. It's a

0:15:02.360 --> 0:15:07.080
<v Speaker 1>high conviction portfolio where we understand the holdings incredibly well.

0:15:07.200 --> 0:15:10.640
<v Speaker 1>We talked to management teams. We identify companies that are

0:15:11.040 --> 0:15:15.680
<v Speaker 1>making real progress, and we're finding opportunities in small cap

0:15:15.760 --> 0:15:21.000
<v Speaker 1>space where the rating agencies haven't necessarily picked up coverage

0:15:21.080 --> 0:15:25.240
<v Speaker 1>yet and the companies are showing a mutually beneficial relationship

0:15:25.640 --> 0:15:29.840
<v Speaker 1>between their efforts to improve their relationship with all stakeholders

0:15:30.280 --> 0:15:34.560
<v Speaker 1>and their bottom line performance. And so that's a fantastic

0:15:34.600 --> 0:15:39.280
<v Speaker 1>breeding ground for us to identify idiosyncratic, unique investing opportunities

0:15:39.280 --> 0:15:41.960
<v Speaker 1>for clients. Hey, well share with us if you will,

0:15:42.120 --> 0:15:44.240
<v Speaker 1>kind of one of your your bigger holdings, your higher

0:15:44.240 --> 0:15:47.240
<v Speaker 1>conviction names that's in your sustainable E t F and

0:15:47.640 --> 0:15:52.840
<v Speaker 1>why it's in there. Yeah, absolutely, Um, so you know

0:15:53.360 --> 0:15:55.680
<v Speaker 1>I'll give you one that you might not suspect is

0:15:55.840 --> 0:15:59.920
<v Speaker 1>an E s G type holding. UM Skyline Champion is

0:16:00.080 --> 0:16:04.640
<v Speaker 1>is Takr sk Y, our largest holding in that portfolio.

0:16:05.480 --> 0:16:12.400
<v Speaker 1>Skyline Champion manufacturers manufactured housing. In the environment that we're in,

0:16:13.400 --> 0:16:18.480
<v Speaker 1>where affordable housing is effectively in a crisis, they're a solution. UH.

0:16:18.600 --> 0:16:22.640
<v Speaker 1>The average manufactured house is more than two hundred thousand

0:16:22.680 --> 0:16:26.680
<v Speaker 1>dollars less expensive than the average stick built house for

0:16:26.720 --> 0:16:30.480
<v Speaker 1>an equivalent home. UH, They're able to produce them more efficiently.

0:16:30.840 --> 0:16:34.840
<v Speaker 1>They're able to produce the more environmentally friendly ways than

0:16:35.160 --> 0:16:39.360
<v Speaker 1>an outdoor stick built home. UH. We believe that this

0:16:39.440 --> 0:16:42.280
<v Speaker 1>is an opportunity for investors to recognize they can buy

0:16:42.280 --> 0:16:46.960
<v Speaker 1>a house that's more environmentally friendly, built more efficiently, more affordable,

0:16:48.480 --> 0:16:51.120
<v Speaker 1>and find a company that actually benefits from those trends.

0:16:51.520 --> 0:16:58.800
<v Speaker 1>As folks start to shift towards rural and more suburban housing.

0:16:59.360 --> 0:17:03.240
<v Speaker 1>They are beneficiary of this environment. The company is in

0:17:03.320 --> 0:17:07.679
<v Speaker 1>a effectively a duopoly with Clayton. There are not a

0:17:07.680 --> 0:17:12.000
<v Speaker 1>lot of other manufacturers. Demand is ramping incredibly. They've made

0:17:12.000 --> 0:17:18.360
<v Speaker 1>tremendous strides in their ability to UH have a diverse workforce. UH.

0:17:18.440 --> 0:17:24.520
<v Speaker 1>They made um a focused effort to diversify the range

0:17:24.760 --> 0:17:29.679
<v Speaker 1>of backgrounds and opinions for years and this has really

0:17:29.720 --> 0:17:33.640
<v Speaker 1>helped them manage the company through what's been a tumultuous.

0:17:33.680 --> 0:17:35.960
<v Speaker 1>You know twenty four months, is it the biggest holding

0:17:35.960 --> 0:17:40.160
<v Speaker 1>in CBL as as well? It is yes. When we

0:17:40.240 --> 0:17:43.600
<v Speaker 1>have high conviction and a security and we understand it well, Um,

0:17:43.760 --> 0:17:46.160
<v Speaker 1>you'll see that we own it in size in both

0:17:46.200 --> 0:17:49.600
<v Speaker 1>portfolios generally. Hey, Rolls, thanks so much for joining us,

0:17:49.680 --> 0:17:53.840
<v Speaker 1>really appreciated. Ross Klein their founder and chief investment officer

0:17:53.960 --> 0:17:58.080
<v Speaker 1>of chain Bridge Capital LLC. They're an active et F

0:17:58.240 --> 0:18:02.639
<v Speaker 1>manager running two strategies again to sustainable strategy in a

0:18:02.640 --> 0:18:05.879
<v Speaker 1>long short strategy as well. Want to Skyline is one

0:18:05.880 --> 0:18:09.040
<v Speaker 1>of their names. I want to plug. Also his UH nonprofit,

0:18:09.240 --> 0:18:12.440
<v Speaker 1>Ross is on the advisory Advisory Council for Graceful Gears,

0:18:13.040 --> 0:18:17.000
<v Speaker 1>which is a nonprofit that provides elite automobile experiences to

0:18:17.080 --> 0:18:21.840
<v Speaker 1>people's serious medical conditions. So bringing joy to people who

0:18:22.119 --> 0:18:25.000
<v Speaker 1>who need it, um with sweet cars and I think

0:18:25.000 --> 0:18:27.000
<v Speaker 1>that's pretty awesome. Yeah, I'm glad you brought that up. Matt.

0:18:31.200 --> 0:18:33.040
<v Speaker 1>Let's bring on the next guest, Matt Tammy. Hey good.

0:18:33.480 --> 0:18:36.359
<v Speaker 1>She's a vice president and financial advisor at UBS and UH.

0:18:36.560 --> 0:18:40.160
<v Speaker 1>She created the Impact Investment Group at UBS. Let's talk

0:18:40.440 --> 0:18:42.600
<v Speaker 1>E s G investing. It's just one of the fastest

0:18:42.600 --> 0:18:45.840
<v Speaker 1>growing areas within investing and Tammy, thanks so much for

0:18:45.920 --> 0:18:48.720
<v Speaker 1>joining us here. I'd love to get your thoughts on

0:18:49.440 --> 0:18:54.480
<v Speaker 1>what really makes a good representative E s G stock

0:18:54.560 --> 0:19:00.639
<v Speaker 1>in your mind. Him, I'm happy to be on with

0:19:01.400 --> 0:19:06.600
<v Speaker 1>you today. Uh. Yes, that's the question that many of

0:19:06.640 --> 0:19:11.240
<v Speaker 1>my clients come to us and ask. And what we're

0:19:11.359 --> 0:19:17.359
<v Speaker 1>looking at for E s G is um the totality

0:19:17.640 --> 0:19:23.200
<v Speaker 1>of a company and what that means is that they're

0:19:23.240 --> 0:19:29.000
<v Speaker 1>not only doing what they do well in terms of environmental, social,

0:19:29.160 --> 0:19:35.119
<v Speaker 1>and government, but they have an intentionality of improving. So

0:19:35.560 --> 0:19:38.199
<v Speaker 1>we don't want to play goatch you with companies. We

0:19:38.280 --> 0:19:43.719
<v Speaker 1>want everybody to um feel like they can participate in

0:19:44.040 --> 0:19:47.560
<v Speaker 1>E s G. But we look for companies that are

0:19:47.640 --> 0:19:53.600
<v Speaker 1>moving in the right direction moving whether is moving more

0:19:53.760 --> 0:19:59.280
<v Speaker 1>to carbon capture or whether is um on on the

0:19:59.359 --> 0:20:05.040
<v Speaker 1>social as that really go deaving into those diversity inclusions

0:20:05.160 --> 0:20:10.200
<v Speaker 1>and government issues. So you created the Impact Investment Group

0:20:10.359 --> 0:20:13.840
<v Speaker 1>at UBS will walk us through what impact investing is

0:20:13.880 --> 0:20:17.359
<v Speaker 1>as opposed to you know, other E s G investing

0:20:17.480 --> 0:20:22.679
<v Speaker 1>or activists investing. Well, that's a great question. Uh. Ten

0:20:22.760 --> 0:20:27.480
<v Speaker 1>years ago we started the Impact Investment groups, so we

0:20:27.480 --> 0:20:29.800
<v Speaker 1>were a little bit ahead of the curve on this,

0:20:30.520 --> 0:20:33.399
<v Speaker 1>And what we try to do is we try to

0:20:34.280 --> 0:20:41.000
<v Speaker 1>advise our clients across an umbrella of um financial activities,

0:20:41.119 --> 0:20:49.040
<v Speaker 1>whether it's market rate, securities, are alternatives, or philanthropy. And

0:20:49.359 --> 0:20:54.040
<v Speaker 1>our real position on this at the Impact Investment Group

0:20:54.720 --> 0:21:00.480
<v Speaker 1>is that you want to target those areas that you

0:21:00.920 --> 0:21:05.760
<v Speaker 1>are interested in influencing, and you want to target them

0:21:05.760 --> 0:21:09.920
<v Speaker 1>with each one of those lasers, if you will, the

0:21:10.560 --> 0:21:19.720
<v Speaker 1>market rate, securities, the the alternative, and also with your

0:21:19.720 --> 0:21:25.200
<v Speaker 1>philanthropy and and make something of the umbrella that that

0:21:25.800 --> 0:21:32.560
<v Speaker 1>at least has some targeted point of view on the

0:21:32.600 --> 0:21:36.320
<v Speaker 1>way you want to impass the world. So so that's

0:21:36.440 --> 0:21:39.639
<v Speaker 1>our approach. So Temmy, when my financial advisor approaches me

0:21:39.680 --> 0:21:43.080
<v Speaker 1>with an idea, you know, Mike, silly question, or maybe

0:21:43.080 --> 0:21:45.480
<v Speaker 1>the only question is all right, what kind of return

0:21:45.520 --> 0:21:48.200
<v Speaker 1>can I expect here? But are you when you talk

0:21:48.240 --> 0:21:49.840
<v Speaker 1>to your clients, are you getting more and more of

0:21:50.000 --> 0:21:52.760
<v Speaker 1>your clients saying, talk to me about the E. S

0:21:52.840 --> 0:21:56.600
<v Speaker 1>G aspects of this idea you're bringing to me. Because

0:21:57.200 --> 0:21:58.920
<v Speaker 1>I don't think about it that way, but I think

0:21:58.960 --> 0:22:03.960
<v Speaker 1>I'm increasingly in the mind party. Well, you know, I

0:22:04.000 --> 0:22:08.720
<v Speaker 1>think that there are people that at the very forefront

0:22:08.840 --> 0:22:12.879
<v Speaker 1>of their minds, have the E s G or the

0:22:13.040 --> 0:22:20.200
<v Speaker 1>social investment screen that they think about. But I've yet

0:22:20.320 --> 0:22:24.560
<v Speaker 1>to need a person that doesn't care about the quality

0:22:24.600 --> 0:22:28.639
<v Speaker 1>of the water that they drink or the air that

0:22:28.760 --> 0:22:32.959
<v Speaker 1>they breathe. And so I break it into two groups.

0:22:33.080 --> 0:22:37.439
<v Speaker 1>I break it into the evangelist group of people that

0:22:37.800 --> 0:22:44.119
<v Speaker 1>really UM want to talk about UM this and have

0:22:44.320 --> 0:22:50.040
<v Speaker 1>studied it right. And then I break it into more

0:22:50.160 --> 0:22:55.119
<v Speaker 1>of the lay person that wants to have investments that

0:22:55.560 --> 0:22:59.760
<v Speaker 1>have a positive impact on their future and their kids

0:23:00.000 --> 0:23:04.960
<v Speaker 1>and choos UM and and want to do things that

0:23:05.680 --> 0:23:11.520
<v Speaker 1>aligned with that. Now you mentioned return, and I think

0:23:11.520 --> 0:23:16.320
<v Speaker 1>that that's an interesting question because UM, over the last

0:23:17.040 --> 0:23:20.639
<v Speaker 1>let's say five to seven years, the return on E

0:23:20.880 --> 0:23:24.359
<v Speaker 1>s G has been it's higher than that of the

0:23:24.480 --> 0:23:32.439
<v Speaker 1>SMP five hundreds simply by deleting UM fossil fuels. So, Tammy,

0:23:32.480 --> 0:23:33.960
<v Speaker 1>we don't have enough time, but I want to get

0:23:33.960 --> 0:23:36.760
<v Speaker 1>you back on because I'd love to ask you kind

0:23:36.760 --> 0:23:40.040
<v Speaker 1>of an off script question. But I noticed you studied

0:23:40.400 --> 0:23:42.320
<v Speaker 1>You got your j D in securities and tax law,

0:23:42.359 --> 0:23:44.680
<v Speaker 1>which makes sense for your industry, But you studied physics

0:23:44.720 --> 0:23:47.720
<v Speaker 1>and electrical engineering at Tuskegee and I just wonder what

0:23:47.840 --> 0:23:50.600
<v Speaker 1>kind of impact that has had on your career and

0:23:50.640 --> 0:23:55.280
<v Speaker 1>how you have designed um uh, you know, your program

0:23:55.280 --> 0:23:57.080
<v Speaker 1>at UBS. So I hope we can get you back

0:23:57.119 --> 0:24:00.080
<v Speaker 1>on again because I think it's really fascinating to me.

0:24:00.160 --> 0:24:03.280
<v Speaker 1>Hey Good there is vice president and financial advisor at UBS.

0:24:03.359 --> 0:24:07.600
<v Speaker 1>She created the Impact Investment Group. Thanks for listening to

0:24:07.600 --> 0:24:11.080
<v Speaker 1>the Bloomberg Markets podcast. You can subscribe and listen to

0:24:11.200 --> 0:24:15.359
<v Speaker 1>interviews with Apple Podcasts or whatever podcast platform you prefer.

0:24:15.720 --> 0:24:19.720
<v Speaker 1>I'm Matt Miller. I'm on Twitter at Matt Miller three

0:24:20.160 --> 0:24:22.600
<v Speaker 1>and on Fall Sweeney. I'm on Twitter at pt Sweeney

0:24:22.640 --> 0:24:25.320
<v Speaker 1>Before the podcast. You can always catch us worldwide at

0:24:25.320 --> 0:24:26.120
<v Speaker 1>Bloomberg Radio