In this article, the authors explore six quantitative environmental (E), social (S), and governance (G) strategies to provide insights into best practices for ESG portfolio construction. These strategies offer different approaches to the trade-off between desired ESG attributes and investment performance. They conclude that fully understanding the dynamics of these trade-offs will allow investors to select the strategy that best matches their ethical and financial views.
Free Is a Dangerous Word (Especially during a Pandemic)
by Patrick Geddes & Dan SpierIn the past 18 months, we’ve witnessed some extraordinary changes in how retail stock investors trade, from the broad shift for many brokerage firms toward zero commissions to the jump in trading by individuals in 2020, presumably a result of the pandemic...
Addressing Diversity, Equity, and Inclusion in Public Equity Portfolios
by Mark BatemanUntil January 20, 2021, Condoleezza Rice will have been the highest-ranking African American woman to serve in the executive branch of the US government, having served as secretary of state from 2005 to 2009. With Kamala Harris’ assumption of the vice presidency...
The passing this week of Jack Bogle, founder of Vanguard, has highlighted what an extraordinary ethical visionary he has been. While we may mourn his death, we also celebrate how much better the world is because of his impact. Though Bogle may be remembered most for the invention of the index mutual fund in the 1970s, his most impressive achievement has been in providing such a marvelous example of how all businesses, not just the investment industry, need to be grounded in stewardship. For Bogle, that word meant that as a business you could act as a capitalist and strive to make money, but it still remains incumbent upon you to treat your clients honorably and honestly. It’s heartening that Bogle was still alive to see the massive transition to lower-fee offerings like indexing in an industry too often focused on its own enrichment rather than the wealth of its clients. Investors certainly owe him a debt of gratitude for the potentially hundreds of billions of dollars he saved them in lower fees, but we all owe him for leading through his personal choices the kind of ethical life that has so substantially improved the lives of others.
On a personal note, the one thing I’ll hold against Jack Bogle is that he set the bar so very high for honorable behavior in the business world. Though virtually none of us can ever contribute to the good of society to the extent Bogle has, we can at least aspire to follow his commitment to doing the right thing.
This article is provided for informational purposes only. The information contained within this article was carefully compiled from sources Aperio believes to be reliable, and it is accurate to the best of our knowledge and belief. However, Aperio cannot guarantee its accuracy, completeness, and validity, and cannot be held liable for any errors or omissions. All information contained herein should be independently verified and confirmed. Aperio does not accept any liability for any loss or damage whatsoever caused in reliance upon such information. Aperio provides this information with the understanding that it is not engaged in rendering legal, accounting, or tax services. In particular, none of the examples should be considered advice tailored to the needs of any specific investor. Aperio recommends that all investors seek out the services of competent professionals in any of the aforementioned areas. With respect to the description of any investment strategies, simulations, or investment recommendations, Aperio cannot provide any assurances that they will perform as expected and as described in this article. Past performance is not indicative of future results. Every investment program has the potential for loss as well as gain. You cannot invest directly in an index.
Aperio is providing this link to a third-party website that displays a research report, article, webcast, video, or other content that we believe may be informational or educational for you. This linked content is presented by a source that we believe to be reliable, but we do not guarantee its accuracy or completeness, including any associated disclosures. Aperio has no control over the nature of the content on, or the availability of, this third-party website.
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Patrick Geddes
Chief Executive Officer and Chief Tax Economist
What are your key responsibilities? As the CEO, I help set the company’s direction and brand, make the final decisions on most resource allocations, and attempt to nurture a healthy culture. As Aperio’s Chief Tax Economist, I analyze cash flows for complicated tax situations facing our clients and their tax advisors, including charitable donations, incentive options, and estate/gift tax scenarios.
Describe your key previous work experience. Prior to cofounding Aperio, I was the Research Director and CFO at Morningstar. In addition, I have taught graduate-level portfolio theory, which has proven quite applicable at Aperio. Also helpful was learning how to build complex after-tax cash flow models at an oil company.
What is the most interesting aspect of the job to you? Throughout my career, I’ve been obsessed with how much power corrupts consciousness and reinforces bias. Now that I’m a CEO, it’s fascinating to watch myself fall into the same traps of self-justification I’ve observed in other leaders over the years and learn how to rely on colleagues to help catch my blind spots. Furthermore, the intellectual challenge of complicated investment problems continues to prove greatly satisfying.
Describe some noteworthy projects you have worked on that directly impact Aperio’s clients. I’ve been closely involved with a wide range of new strategies and features, and still meet with many of our clients. I particularly enjoy the balancing of running a for-profit business while emphasizing the treatment of clients with an exacting level of transparency and honesty, including taking full ownership when we make mistakes.
What do you like most about working at Aperio? It’s an incredible honor to work with such smart people, although I often observe that this CEO unjustly gets credit for the creativity, cleverness, and sheer effort of others around him.
What previous role(s) did you serve at Aperio? For many years, I was Aperio’s Chief Investment Officer.
What are some non-work-related things we should know about you? I love to cook, which proves gratifying since I spend so much of my work time in my head, and cooking is such a physical experience, especially the olfactory delights of spices. My other interests include reading, bicycling, hiking, and listening to Renaissance/Early Baroque music.
What postsecondary degrees and/or professional certifications do you possess? BA in History from Yale University; MBA in Finance from the University of Chicago.
In the past 18 months, we’ve witnessed some extraordinary changes in how retail stock investors trade, from the broad shift for many brokerage firms toward zero commissions to the jump in trading by individuals in 2020, presumably a result of the pandemic...
In June, we posted our “Statement on Racism” and said that we were developing plans on what Aperio could do to help move toward racial justice. Through these blogs, we’re sharing our journey...
After our recent analysis of the impact of some of the Biden tax proposals on loss harvesting, we met several times with a number of tax experts among our clients to share our findings and listen to their views...
"Restoring Value to Minimum Variance" – Journal of Investment Management, Second Quarter 2014 (received a Harry M. Markowitz Special Distinction Award)
"The Pursuit of After-Tax Returns: Indexed Exchange-Traded Funds vs. Indexed Separately Managed Accounts" – Investments & Wealth Monitor, September/October 2011