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The Periodic Table of Investments

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Periodic Table of Investments

Periodic Table of Investments

The investment universe is vast, but it’s also made up of many smaller moving pieces.

For serious investors, the foundation of the discipline is to understand the properties of these individual components, and to have them work in harmony to achieve a specific portfolio goal.

To do this successfully, one must understand the breadth of asset classes, tactics, and categories of investments that exist – and to know how they relate to one another.

The Chemicals Between Us

Today’s infographic comes from Phil Huber, the Chief Investment Officer for Huber Financial Advisors, who has cleverly depicted this relationship graphically in his blog.

Similar to how the physical universe is made up of chemical elements, he sees the possibilities around portfolio management as drawing from a broad pool of investing “elements”. Combine these different elements together, and you get compounds, structures, and eventually entire funds.

The periodic table of investments created by his team denotes each type of investment, the primary and secondary strategy related to it, and a color classification:

Periodic table legend

Here are the seven objectives that the top letters on each box refer to:

Periodic table strategies

And finally, here are the colors that each block on the periodic table correspond to:

Periodic table color coding

As you can see, considerable thought has been put into the categories and classifications. However, as Phil notes, this is simply the opinion of one person and it is not intended to be a universally accurate depiction of all portfolio management wisdom that exists:

I fully expect that there are a handful of omissions, or perhaps a few areas where one might flat-out disagree with how I’ve laid things out. This was not meant to be 100% exhaustive, nor was it meant to be indicative of what one of our portfolios looks like.

Phil Huber, Chief Investment Officer

For more of the lessons that can be derived from this clever periodic table of investments, we suggest checking out the original post on Huber’s blog.

Is there anything that he missed, or that you think could be classified better?

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Investor Education

Which Climate Metrics Suit Your Investment Goals Best?

When selecting climate metrics, it is important to consider your purpose, the applicability and acceptability of the climate strategy, and the availability of historical data.

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Which Climate Metrics Suit You Best? MSCI

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The following content is sponsored by MSCI

Which Climate Metrics Suit Your Investment Goals Best?

According to PwC, 44% of investors believe that companies should prioritize reducing greenhouse gas emissions across their own operations and supply chain.

In this graphic from our sponsor, MSCI, we break down climate metrics and provide valuable insights to help build sustainability-aligned portfolios without the fear of falling for greenwashing.

Essential Climate Metrics for Investors

Here are some widely-used climate metrics, as categorized by MSCI:

Climate MetricDescription
#1Carbon Emissions EVIC IntensityMeasures greenhouse gas emissions per $1 million of financing.
#2Potential Carbon EmissionsEstimates emissions from fossil fuel reserves owned by a company.
#3Implied Temperature Rise (ITR)Assesses alignment with global warming scenarios.
#4Carbon Emissions Revenue IntensityQuantifies emissions per $1 million of revenue.
#5Fossil Fuel RevenueDetermines revenue percentage from fossil fuel-related activities.
#6Cleantech RevenueDetermines revenue percentage from environmental and climate opportunities.
#7Low Carbon Transition (LCT) ScoreEvaluates a company’s exposure to climate transition opportunities.
#8Transition Climate VaRAssesses costs from carbon pricing and low-carbon opportunities.
#9Physical Climate VaREvaluates costs from increased exposure to physical hazards.

Choosing the Right Metrics

Climate investing requires selecting the right measurement tools. For that, it is important to consider your purpose, the applicability, and acceptability of the climate strategy, and the availability of historical data for analysis, among other factors. The infographic above contains a flowchart designed to guide you through several key questions.

For example, do you want to:

  1. Measure your portfolio’s impact on the climate or the climate’s impact on your portfolio?
  2. Analyze present or forward-looking data?
  3. Assess direct impact or indirect impact via supply chains?
  4. Evaluate potential future emissions or projected temperature rise?
  5. Focus on climate risks or opportunities?

MSCI’s climate metrics toolkit can help investors confidently measure, manage, and report their climate risks and opportunities.

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Download MSCI’s climate metrics toolkit now.

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