In late August 2020 the US Federal Reserve officially relaxed its inflation target of 2% saying that it may let inflation run above that level into the future, before it next raises interest rates. Last time the Fed raised interest rates(four times in 2018) it was precisely to combat the prospect of future inflation amidst a tightening labour market. And while markets initially interpreted the Fed’s new policy as meaning bond yields will stay lower for longer, this new policy is stimulatory and means that long bond yields can start to rise without inflation. Why? Because without the Fed being on watch for a specific level of inflation, and being willing to pre-empt it, markets will now have to be more vigilant.
While the Fed’s new policy is a necessary, but not sufficient condition to actually achieve inflation, coupling it with global economies in the midst of re-opening and the largest-stimulus-ever working its way through financial systems, the risk of inflation has indeed risen.
Mirvac: Sustainability leader
During the month we met with the Mirvac sustainability team. Mirvac continues to be an ESG leader in our view and it is a company where over time the market will continue to assign a higher rating to the stock as a result. Sustainability “is” the business at Mirvac. It isn’t an afterthought or a set of strategies added on to the core business strategy. The company’s sustainability positioning statement of “Reimagine Urban Life” is particularly interesting given COVID19. We asked if it was time to “reimagine” Reimagine Urban Life given the changing lifestyle trends of work from home, less time in cities, preference for landed houses over apartments and so on during and post COVID19.
Full update attached
While the response to climate change risk by regulators, financial institutions and publicly listed companies is welcome, it currently is not enough to ensure a safe climate. This submission provides a comprehensive assessment of the current risks relating to Australia's key export sectors.
It is estimated that 100 pairs of hands touch your clothes before they arrive in your wardrobe. That’s 100 people at risk of modern slavery, poor working conditions, and exploitation. Ethical Partners has recently signed the Investor Statement in Support of the maintenance and expansion of the Bangladesh Accord.
During March 2021 the Fund returned 3.07% versus the S&P/ASX 300 Accumulation Index of 2.30%, outperforming the market by 0.77%. An overweight position in consumer staples and an underweight position in materials contributed to relative performance while an overweight position in financials and an underweight position in consumer discretionary detracted from relative performance. The Fund is +20% over the last six months.
Globally, 15% of the population are persons with disabilities. The labor force participation rate globally for people with disabilities sits at 32.8% compared to 77.1% for those without disabilities. We believe it is imperative that investors use their shareholder voice to raise the awareness of this important diversity issue and help companies to improve their inclusion.