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What Issues Do Values-Driven Investors Care About?

Published

2 years ago

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What Issues Do Values-Driven Investors Care About?

The Briefing

  • Values-driven investing has become popular across a variety of age groups
  • However, different age groups value different issues over others
  • Young investors (age 25-39) are most concerned about climate change and plastic in the ocean
  • In contrast, investors aged 55+ care more about data fraud and gun control

What Issues Do Values-Driven Investors Care About?

Contrary to popular belief, environmental, social, and governance (ESG) investing isn’t just for the younger generation.

In fact, more than 80% of investors aged 40+ are interested in aligning their investment portfolios with their personal values, which is only around 10 percentage points less than the younger demographic (aged 25-39).

However, while overall intent to invest in the greater good is consistent across the board, the top concerns among investors vary, depending on age.

Here’s a look at the top issues that investors want addressed in their portfolios, by age group:

Age Group
Issues Investors Want Included in Their Portfolio25-39 years old40-54 years old55+ years old
Global warming/ climate change34%34%27%
Impact of plastic on the oceans21%30%26%
Sustainability24%23%17%
Data fraud or theft14%20%29%
Gun control13%20%22%

Young Investors Care More About Long-Term Issues

As the table above shows, the top concern among investors aged 25-39 is climate change, followed by sustainability in general.

This makes sense, considering that younger investors will most likely be around to deal with the consequences of long-term issues like climate change and plastic pollution.

In contrast, investors with a shorter time horizon to retirement (aged 55+) are more concerned with immediate threats like gun control and data fraud.

How To Execute on Values-Driven Investments

It’s clear that investors of all ages are interested in values-driven investing—but how can investors take action to build a portfolio that reflects their beliefs?

There are two approaches to building a sustainable investment portfolio:

  • Exclusionary investing
    Also known as negative screening, or divesting. This is when investors screen out industries that go against their values, such as tobacco, gambling, or fossil fuels.
  • Inclusionary investing
    Also knowns as positive screening. This is when investors formally consider ESG factors in their research process under the assumption that companies with strong sustainability practices can outperform their industry peers over time.

While exclusionary investing is the more common approach, research on the effectiveness of inclusionary investing has been overwhelmingly positive.

» For a more in-depth look on the top of values driven investing, read our full article The Rise of the Values-Driven Investor

Where does this data come from?

Source: New York Life, 2019.
Notes: Data was derived from a 2019 study conducted by New York Life Investments,
in partnership with RTi Research.

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Economy

Charted: Public Trust in the Federal Reserve

Public trust in the Federal Reserve chair has hit its lowest point in 20 years. Get the details in this infographic.

Published

2 weeks ago

on

May 23, 2023

By

The Briefing

  • Gallup conducts an annual poll to gauge the U.S. public’s trust in the Federal Reserve
  • After rising during the COVID-19 pandemic, public trust has fallen to a 20-year low

 

Charted: Public Trust in the Federal Reserve

Each year, Gallup conducts a survey of American adults on various economic topics, including the country’s central bank, the Federal Reserve.

More specifically, respondents are asked how much confidence they have in the current Fed chairman to do or recommend the right thing for the U.S. economy. We’ve visualized these results from 2001 to 2023 to see how confidence levels have changed over time.

Methodology and Results

The data used in this infographic is also listed in the table below. Percentages reflect the share of respondents that have either a “great deal” or “fair amount” of confidence.

YearFed chair% Great deal or Fair amount
2023Jerome Powell36%
2022Jerome Powell43%
2021Jerome Powell55%
2020Jerome Powell58%
2019Jerome Powell50%
2018Jerome Powell45%
2017Janet Yellen45%
2016Janet Yellen38%
2015Janet Yellen42%
2014Janet Yellen37%
2013Ben Bernanke42%
2012Ben Bernanke39%
2011Ben Bernanke41%
2010Ben Bernanke44%
2009Ben Bernanke49%
2008Ben Bernanke47%
2007Ben Bernanke50%
2006Ben Bernanke41%
2005Alan Greenspan56%
2004Alan Greenspan61%
2003Alan Greenspan65%
2002Alan Greenspan69%
2001Alan Greenspan74%

Data for 2023 collected April 3-25, with this statement put to respondents: “Please tell me how much confidence you have [in the Fed chair] to recommend the right thing for the economy.”

We can see that trust in the Federal Reserve has fluctuated significantly in recent years.

For example, under Alan Greenspan, trust was initially high due to the relative stability of the economy. The burst of the dotcom bubble—which some attribute to Greenspan’s easy credit policies—resulted in a sharp decline.

On the flip side, public confidence spiked during the COVID-19 pandemic. This was likely due to Jerome Powell’s decisive actions to provide support to the U.S. economy throughout the crisis.

Measures implemented by the Fed include bringing interest rates to near zero, quantitative easing (buying government bonds with newly-printed money), and emergency lending programs to businesses.

Confidence Now on the Decline

After peaking at 58%, those with a “great deal” or “fair amount” of trust in the Fed chair have tumbled to 36%, the lowest number in 20 years.

This is likely due to Powell’s hard stance on fighting post-pandemic inflation, which has involved raising interest rates at an incredible speed. While these rate hikes may be necessary, they also have many adverse effects:

  • Negative impact on the stock market
  • Increases the burden for those with variable-rate debts
  • Makes mortgages and home buying less affordable

Higher rates have also prompted many U.S. tech companies to shrink their workforces, and have been a factor in the regional banking crisis, including the collapse of Silicon Valley Bank.

Where does this data come from?

Source: Gallup (2023)

Data Notes: Results are based on telephone interviews conducted April 3-25, 2023, with a random sample of –1,013—adults, ages 18+, living in all 50 U.S. states and the District of Columbia. For results based on this sample of national adults, the margin of sampling error is ±4 percentage points at the 95% confidence level. See source for details.

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