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.
Impact of Biden’s Capital Gains Proposal on the Performance of Loss-Harvesting Strategies
by Pete Hand & Ben SchneiderAs part of a broader tax plan, US presidential candidate Joe Biden has proposed changes to the treatment of capital gains. Because Aperio manages portfolios designed to increase investors’ capital gains efficiency, we explored the impact of the proposed changes...
An Open Letter to ESG Vendors (and others who may care)
by Mark BatemanDear ESG Vendor: Having recently completed a comprehensive review of the ESG data offerings from most of the prominent ESG vendors, we want to share some of what we learned about the state of ESG research and data...
Months ago, I saved an issue of Journal of Environmental Investing fully intending to read it—and after carrying it with me for more than 50,000 air miles, I eventually did. I’m glad I held on to it. With the proliferation of ESG (environmental, social, and governance) data, ratings, and indexes, it is helpful to see these metrics considered comprehensively and with some perspective, divorced from the marketing packaging that seems to drive much of the related discussion. In particular, the first section on The Ecosystem of ESG Data, with contributions by Dan Etsy and Todd Cort of Yale University, is particularly useful. This is not to suggest that we agree with all points made or even that within Aperio we all have a uniform view but rather that we found it to be a thoughtful presentation of the issues and a great starting point for further research and discussion.
No data set or rating is ever perfect nor removed from the subjectivity of the creator, but in order to make the most informed decisions about its use, it is important to understand what biases and limitations are built in. For each investor and user, what is acceptable and what isn’t will likely vary.
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.
The inclusion of this link on our website also does not imply a recommendation or endorsement of any views expressed in such linked content and should not be considered: investment, tax, or legal advice; a solicitation; a recommendation of Aperio or any third-party’s services; or an offer to buy or sell any securities or related financial instruments in any jurisdiction.
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Liz Michaels
Chief of Staff (Chicago)
What are your key responsibilities? I wear a number of hats at Aperio, including Chief of Staff, along with overseeing our SRI/ESG, marketing and strategy, and business development efforts. And, of course, there is the most fashion-forward of my hats—“other duties as assigned”—which may change with the season, but it’s always important to have something unexpected to keep things interesting.
Describe your key previous work experience. My relevant experience falls into two buckets. The more obvious professional experience: I spent time at Morningstar and Ibbotson learning about data (building data sets, creating ways for investment professionals and researchers to access and use the data in thoughtful ways), about financial advisors (understanding their business so that we could best support them in best serving their clients), about communication (both words and visuals—good writing, expressed in a way that engages and respects the intended audience, visuals that enhance understanding and are consistent). I also spent time at Jellyvision learning about business and a different approach to an interactive communication and education. And then there are the less obvious experiences: Little Red School House focused on training us to be at best clear writers and at a minimum able to identify good writing, probably the most valuable class I took as an undergrad at the University of Chicago; and my liberal arts background, which has proved to be incredibly valuable in working with clients on translating their values into investment portfolios.
What is the most interesting aspect of the job to you? It has been a privilege to be able to engage with clients with many different value sets and worldviews—to learn from them about different issue areas and how they think about them. And then collaborate with our researchers and portfolio managers to find a solution that uniquely reflects each client’s values.
Describe some noteworthy projects you have worked on that directly impact Aperio’s clients. Currently, I have been working with an internal team on how to better communicate tracking error—how do we help set more realistic expectations, given what we understand, to reduce disappointments.
What do you like most about working at Aperio? A bit cliché, but the people are what I like most about working here. Folks at Aperio have chosen to be part of this firm, our approach, our values, and our mission. It is amazing to be part of a group that is striving to do better and to do the right thing by each other and by our clients. I learn from my colleagues on a daily basis—sometimes about business-related stuff and sometimes about books to read, shows to watch, and recipes to try.
What previous role(s) did you serve at Aperio? I have been at Aperio 11 years, and my role has evolved as we have grown. I live in Chicago so have had the responsibility for our area relationships. While I am still involved, the lead for this is now handled (better) by Julie Enderson and Ellen Reynolds.
What are some non-work-related things we should know about you? Well … I now have three dogs running around my apartment (yes, that is barking in the background!), so I spend a fair amount of time just walking them. Working on my bread baking and mah-jongg game—both kind of at the same stage: I have the equipment and the directions, but things don’t always turn out quite as desired. Contemplating a Half Iron Man for 2020 … which is one approach to filling your time after sending your youngest off to college.
What postsecondary degrees and/or professional certifications do you possess? BA in Economics and an MBA from the University of Chicago.
Recent Blog Posts
April 25, 2018What We’ve Been Reading & Listening To
Months ago, I saved an issue of Journal of Environmental Investing fully intending to read it—and after carrying it with me for more than 50,000 air miles...
