Black rock socially responsible investing

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doodle
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Black rock socially responsible investing

Post by doodle » Wed Dec 16, 2020 7:57 am

Anyone care to comment regarding Blackrocks new public stance towards climate change and socially responsible investing?

https://www.cnbc.com/2020/12/16/blackr ... 021.html
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Re: Black rock socially responsible investing

Post by Mountaineer » Wed Dec 16, 2020 9:13 am

doodle wrote:
Wed Dec 16, 2020 7:57 am
Anyone care to comment regarding Blackrocks new public stance towards climate change and socially responsible investing?

https://www.cnbc.com/2020/12/16/blackr ... 021.html
Blackrock appears to be trolling for the same fish as the Ds do. ::)
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Re: Black rock socially responsible investing

Post by pmward » Wed Dec 16, 2020 11:29 am

I think it's great. If increased "social responsibility" is directly tied to increase in capital and stock prices, more companies will take it seriously. This is using capitalism itself as a driver for change. Those that don't like it will buy ETF's from a company that doesn't do this. Those that do care about this will invest more in Blackrock ETF's. I personally love it, and their stance on the subject greatly influenced my decision of Blackrock being my ETF company of choice.
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Re: Black rock socially responsible investing

Post by pugchief » Wed Dec 16, 2020 12:15 pm

Social justice investing will draw interest until it sorely lags the S&P 500, which it ultimately will. And then only idiots will invest that way. ::)

It's like the restaurant that told customers to pay whatever they wanted, and then went bankrupt in 6 months because they weren't profitable. :o
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Re: Black rock socially responsible investing

Post by vnatale » Wed Dec 16, 2020 12:47 pm

pugchief wrote:
Wed Dec 16, 2020 12:15 pm
Social justice investing will draw interest until it sorely lags the S&P 500, which it ultimately will. And then only idiots will invest that way. ::)

It's like the restaurant that told customers to pay whatever they wanted, and then went bankrupt in 6 months because they weren't profitable. :o
It has been one of the fastest growing segments of investing for at least three years now. There is demand for it and the supply for it is constantly growing. There is a fairly significant amount of the population who do not compare returns and do make social investing the priority. I am not one of them. But I know others who are.

Vinny
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Re: Black rock socially responsible investing

Post by pugchief » Wed Dec 16, 2020 12:49 pm

vnatale wrote:
Wed Dec 16, 2020 12:47 pm
pugchief wrote:
Wed Dec 16, 2020 12:15 pm
Social justice investing will draw interest until it sorely lags the S&P 500, which it ultimately will. And then only idiots will invest that way. ::)

It's like the restaurant that told customers to pay whatever they wanted, and then went bankrupt in 6 months because they weren't profitable. :o
It has been one of the fastest growing segments of investing for at least three years now. There is demand for it and the supply for it is constantly growing. There is a fairly significant amount of the population who do not compare returns and do make social investing the priority. I am not one of them. But I know others who are.

Vinny
I rest my case.
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Re: Black rock socially responsible investing

Post by pmward » Wed Dec 16, 2020 2:09 pm

pugchief wrote:
Wed Dec 16, 2020 12:15 pm
Social justice investing will draw interest until it sorely lags the S&P 500, which it ultimately will. And then only idiots will invest that way. ::)

It's like the restaurant that told customers to pay whatever they wanted, and then went bankrupt in 6 months because they weren't profitable. :o
Sure the direct ESG funds will likely underperform. But the index funds... the thing they are getting at is an index fund doesn't have to 100% match the index to follow it almost identically. Almost no index funds are perfectly weighted to their index. They can reduce weight on a non "responsible" company a bit and give that weight to a more "responsible" competitor and still track the index, since companies in the same sectors are highly correlated. This means the funds themselves continue to track their benchmarks within the usual small margin of error, however they have created an environment where companies that are more "responsible" get more capital than competitors that are not "responsible", which encourages companies to make changes. It's capitalism doing exactly what it should do. Those that don't like it have the option to not invest in Blackrock ETF's.
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Re: Black rock socially responsible investing

Post by pp4me » Wed Dec 16, 2020 3:00 pm

vnatale wrote:
Wed Dec 16, 2020 12:47 pm
pugchief wrote:
Wed Dec 16, 2020 12:15 pm
Social justice investing will draw interest until it sorely lags the S&P 500, which it ultimately will. And then only idiots will invest that way. ::)

It's like the restaurant that told customers to pay whatever they wanted, and then went bankrupt in 6 months because they weren't profitable. :o
It has been one of the fastest growing segments of investing for at least three years now. There is demand for it and the supply for it is constantly growing. There is a fairly significant amount of the population who do not compare returns and do make social investing the priority. I am not one of them. But I know others who are.

Vinny
I think it's pretty good marketing. You get ROI plus you get to feel good about yourself for being socially responsible. Like the PP however, how long will people stick with it if the ROI lags too far behind?
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Re: Black rock socially responsible investing

Post by vnatale » Wed Dec 16, 2020 3:15 pm

pmward wrote:
Wed Dec 16, 2020 2:09 pm
pugchief wrote:
Wed Dec 16, 2020 12:15 pm
Social justice investing will draw interest until it sorely lags the S&P 500, which it ultimately will. And then only idiots will invest that way. ::)

It's like the restaurant that told customers to pay whatever they wanted, and then went bankrupt in 6 months because they weren't profitable. :o
Sure the direct ESG funds will likely underperform. But the index funds... the thing they are getting at is an index fund doesn't have to 100% match the index to follow it almost identically. Almost no index funds are perfectly weighted to their index. They can reduce weight on a non "responsible" company a bit and give that weight to a more "responsible" competitor and still track the index, since companies in the same sectors are highly correlated. This means the funds themselves continue to track their benchmarks within the usual small margin of error, however they have created an environment where companies that are more "responsible" get more capital than competitors that are not "responsible", which encourages companies to make changes. It's capitalism doing exactly what it should do. Those that don't like it have the option to not invest in Blackrock ETF's.
I have read that this should not be an assumed given...

VInny
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Re: Black rock socially responsible investing

Post by vnatale » Wed Dec 16, 2020 3:17 pm

pp4me wrote:
Wed Dec 16, 2020 3:00 pm
vnatale wrote:
Wed Dec 16, 2020 12:47 pm
pugchief wrote:
Wed Dec 16, 2020 12:15 pm
Social justice investing will draw interest until it sorely lags the S&P 500, which it ultimately will. And then only idiots will invest that way. ::)

It's like the restaurant that told customers to pay whatever they wanted, and then went bankrupt in 6 months because they weren't profitable. :o
It has been one of the fastest growing segments of investing for at least three years now. There is demand for it and the supply for it is constantly growing. There is a fairly significant amount of the population who do not compare returns and do make social investing the priority. I am not one of them. But I know others who are.

Vinny
I think it's pretty good marketing. You get ROI plus you get to feel good about yourself for being socially responsible. Like the PP however, how long will people stick with it if the ROI lags too far behind?
A LONG time! They get into them in the first place because they are not searching out the highest return funds. Plus, for many of them, it's unlikely they'll even become aware of what the funds actual returns are.

One thing that is an eye opener is that as managed funds their fees are significantly higher than Vanguard index fund fees.

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: Black rock socially responsible investing

Post by pp4me » Wed Dec 16, 2020 3:20 pm

vnatale wrote:
Wed Dec 16, 2020 3:17 pm
One thing that is an eye opener is that as managed funds their fees are significantly higher than Vanguard index fund fees.

Vinny
Why doesn't that surprise me? ROI + Social Responsiblity = that'll cost you.

I suspect it will peter out if/when ROI decreases AND there are more and more disagreements about what is socially responsible.
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Re: Black rock socially responsible investing

Post by vnatale » Wed Dec 16, 2020 3:29 pm

pp4me wrote:
Wed Dec 16, 2020 3:20 pm
vnatale wrote:
Wed Dec 16, 2020 3:17 pm
One thing that is an eye opener is that as managed funds their fees are significantly higher than Vanguard index fund fees.

Vinny
Why doesn't that surprise me? ROI + Social Responsiblity = that'll cost you.

I suspect it will peter out if/when ROI decreases AND there are more and more disagreements about what is social responsible.
Yet somehow they overcome that handicap?

Vinny

Socially Responsible Investment Performance vs Traditional Investments

https://aiofinancial.com/socially-respo ... rformance/


These differences will vary from fund to fund and with different indexes but in general SRI funds will be underexposed in Defense, Banks, and Energy and overexposed in Technology. When the overexposed sectors perform better than the overall market or when the underexposed sectors underperform the market, SRI indexes will generally outperform traditional indexes.

In an efficient market, where stock prices are based on publically available information, there are no overpriced or underpriced stocks, making in impossible to predict which will perform better in the long run. Based on the 10 year returns, the SRI index performs very close (slightly better) than the S&P 500.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: Black rock socially responsible investing

Post by pp4me » Wed Dec 16, 2020 5:41 pm

vnatale wrote:
Wed Dec 16, 2020 3:29 pm
pp4me wrote:
Wed Dec 16, 2020 3:20 pm
vnatale wrote:
Wed Dec 16, 2020 3:17 pm
One thing that is an eye opener is that as managed funds their fees are significantly higher than Vanguard index fund fees.

Vinny
Why doesn't that surprise me? ROI + Social Responsiblity = that'll cost you.

I suspect it will peter out if/when ROI decreases AND there are more and more disagreements about what is social responsible.
Yet somehow they overcome that handicap?

Vinny

Socially Responsible Investment Performance vs Traditional Investments

https://aiofinancial.com/socially-respo ... rformance/


These differences will vary from fund to fund and with different indexes but in general SRI funds will be underexposed in Defense, Banks, and Energy and overexposed in Technology. When the overexposed sectors perform better than the overall market or when the underexposed sectors underperform the market, SRI indexes will generally outperform traditional indexes.

In an efficient market, where stock prices are based on publically available information, there are no overpriced or underpriced stocks, making in impossible to predict which will perform better in the long run. Based on the 10 year returns, the SRI index performs very close (slightly better) than the S&P 500.
I prefer investments where I don't have to read paragraphs like those several times and still don't understand what they are trying to say. Which is why I like the PP.
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Re: Black rock socially responsible investing

Post by tomfoolery » Wed Dec 16, 2020 7:33 pm

vnatale wrote:
Wed Dec 16, 2020 3:15 pm
pmward wrote:
Wed Dec 16, 2020 2:09 pm
pugchief wrote:
Wed Dec 16, 2020 12:15 pm
Social justice investing will draw interest until it sorely lags the S&P 500, which it ultimately will. And then only idiots will invest that way. ::)

It's like the restaurant that told customers to pay whatever they wanted, and then went bankrupt in 6 months because they weren't profitable. :o
Sure the direct ESG funds will likely underperform.
I have read that this should not be an assumed given...

VInny
Well, if “socially responsible investing” gets higher returns than other risk-adjusted alternates, then it isn’t socially responsible investing, it’s profit-maximizing investing at that point and I think we just call it “investing”
Last edited by tomfoolery on Wed Dec 16, 2020 7:45 pm, edited 2 times in total.
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Re: Black rock socially responsible investing

Post by tomfoolery » Wed Dec 16, 2020 7:40 pm

How about a socially responsible permanent portfolio?

25% FTSE Social Responsibility Index Fund
25% Fair Trade, Carbon Neutral Gold Bullion
25% West Baltimore Public School Education 30 Year Bonds
25% Venezuelan Bolivar
💉
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Re: Black rock socially responsible investing

Post by vnatale » Wed Dec 16, 2020 8:02 pm

tomfoolery wrote:
Wed Dec 16, 2020 7:33 pm
vnatale wrote:
Wed Dec 16, 2020 3:15 pm
pmward wrote:
Wed Dec 16, 2020 2:09 pm
pugchief wrote:
Wed Dec 16, 2020 12:15 pm
Social justice investing will draw interest until it sorely lags the S&P 500, which it ultimately will. And then only idiots will invest that way. ::)

It's like the restaurant that told customers to pay whatever they wanted, and then went bankrupt in 6 months because they weren't profitable. :o
Sure the direct ESG funds will likely underperform.
I have read that this should not be an assumed given...

VInny
Well, if “socially responsible investing” gets higher returns than other risk-adjusted alternates, then it isn’t socially responsible investing, it’s profit-maximizing investing at that point and I think we just call it “investing”
An explanation for why the companies invested in do better is because they are better companies because of the way they behave. An actual "Good guys finish first".

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: Black rock socially responsible investing

Post by pp4me » Wed Dec 16, 2020 8:10 pm

I've never invested in one of these but I wonder what the prospectuses look like. I mean, do they actually spell out in specific terms what "socially responsible investing" is beyond platitudes of "Combatting Climate Change, Racial Equality, Empowering women", etcetera. I could be wrong but my guess is probably not.
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Re: Black rock socially responsible investing

Post by pp4me » Wed Dec 16, 2020 8:15 pm

vnatale wrote:
Wed Dec 16, 2020 8:02 pm
tomfoolery wrote:
Wed Dec 16, 2020 7:33 pm
vnatale wrote:
Wed Dec 16, 2020 3:15 pm
pmward wrote:
Wed Dec 16, 2020 2:09 pm
pugchief wrote:
Wed Dec 16, 2020 12:15 pm
Social justice investing will draw interest until it sorely lags the S&P 500, which it ultimately will. And then only idiots will invest that way. ::)

It's like the restaurant that told customers to pay whatever they wanted, and then went bankrupt in 6 months because they weren't profitable. :o
Sure the direct ESG funds will likely underperform.
I have read that this should not be an assumed given...

VInny
Well, if “socially responsible investing” gets higher returns than other risk-adjusted alternates, then it isn’t socially responsible investing, it’s profit-maximizing investing at that point and I think we just call it “investing”
An explanation for why the companies invested in do better is because they are better companies because of the way they behave. An actual "Good guys finish first".

Vinny
No woman I have ever been with has believed that.
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Re: Black rock socially responsible investing

Post by vnatale » Wed Dec 16, 2020 8:24 pm

pp4me wrote:
Wed Dec 16, 2020 8:10 pm
I've never invested in one of these but I wonder what the prospectuses look like. I mean, do they actually spell out in specific terms what "socially responsible investing" is beyond platitudes of "Combatting Climate Change, Racial Equality, Empowering women", etcetera. I could be wrong but my guess is probably not.
This page did not exist with Vanguard until a few years ago. A sign of the demand for these type investments. You can find the answer to your question by delving further on this page.

https://investor.vanguard.com/investing/esg/

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats."
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Re: Black rock socially responsible investing

Post by pp4me » Wed Dec 16, 2020 8:59 pm

vnatale wrote:
Wed Dec 16, 2020 8:24 pm
pp4me wrote:
Wed Dec 16, 2020 8:10 pm
I've never invested in one of these but I wonder what the prospectuses look like. I mean, do they actually spell out in specific terms what "socially responsible investing" is beyond platitudes of "Combatting Climate Change, Racial Equality, Empowering women", etcetera. I could be wrong but my guess is probably not.
This page did not exist with Vanguard until a few years ago. A sign of the demand for these type investments. You can find the answer to your question by delving further on this page.

https://investor.vanguard.com/investing/esg/

Vinny
That first page looked like the kind of vague meaningless B.S. you get at work from H.R. and whenever the CEO addresses the company.

I drilled down into the first fund and saw that Microsoft was their number one holding. Pretty sure I already hold a lot Microsoft in my funds so I guess I'm socially responsible after all.
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Re: Black rock socially responsible investing

Post by Pointedstick » Wed Dec 16, 2020 9:00 pm

I have high six figures in Vanguard's ESG index fund and I've made a ton of money in it. The expense ratio is 0.14%, which is not as low as 0.04% for VTSAX, but it's still pretty darn low. The fund has has outperformed VTSAX, and other ESG funds typically show the same pattern. It turns out companies trading in human misery, fucking up the planet, or defrauding their shareholders just don't make as much money as the ones that behave responsibly. My biggest complaint is actually that the inclusion criteria isn't strict enough for my tastes. The fund still has shares in Google, Facebook, JPMorgan Chase, Bank of America, Pepsi, and Coke, none of which I'm a great fan of. Oh well, maybe there's hope someday.

I used to be a big believer in the power of making a buck overcoming prejudice about "green" "socially responsible" etc stuff. I figured, eventually people will have to come over once it's more socially responsible, better, and cheaper! But sadly I have been disappointed over the years. Oh well, more profits for me...
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Re: Black rock socially responsible investing

Post by vnatale » Wed Dec 16, 2020 9:13 pm

Pointedstick wrote:
Wed Dec 16, 2020 9:00 pm
I have high six figures in Vanguard's ESG index fund and I've made a ton of money in it. The expense ratio is 0.14%, which is not as low as 0.04% for VTSAX, but it's still pretty darn low. The fund has has outperformed VTSAX, and other ESG funds typically show the same pattern. It turns out companies trading in human misery, fucking up the planet, or defrauding their shareholders just don't make as much money as the ones that behave responsibly. My biggest complaint is actually that the inclusion criteria isn't strict enough for my tastes. The fund still has shares in Google, Facebook, JPMorgan Chase, Bank of America, Pepsi, and Coke, none of which I'm a great fan of. Oh well, maybe there's hope someday.

I used to be a big believer in the power of making a buck overcoming prejudice about "green" "socially responsible" etc stuff. I figured, eventually people will have to come over once it's more socially responsible, better, and cheaper! But sadly I have been disappointed over the years. Oh well, more profits for me...
hear, hear!!!!

Vinny
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Re: Black rock socially responsible investing

Post by tomfoolery » Thu Dec 17, 2020 12:04 am

If companies and their shareholders can make more money being socially and ecologically responsible then why do we need government regulation at all?

It seems like a mutually exclusive ideology. If you believe we need government regulation then investing in socially responsible companies is done with the expectation of getting reduced return. Or if you think you can “beat the market” by investing in socially responsible companies then you should be against government regulation since the free market would realize all the excess profits to be has by “doing the right thing”

But what do I know, I’m an asparagus :)
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Re: Black rock socially responsible investing

Post by Maddy » Thu Dec 17, 2020 4:26 am

tomfoolery wrote:
Thu Dec 17, 2020 12:04 am
But what do I know, I’m an asparagus :)
And they. . . are Blackrock, which tells you everything you need to know.
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Re: Black rock socially responsible investing

Post by Maddy » Thu Dec 17, 2020 4:30 am

From Catherine Austin Fitts (former Wall Street investment banker and Assistant Sec'y of HUD):
For many years I worked with a passion to create a financial model that would align our accounting, information, and government financial systems with places. My goal was to create a win-win relationship system-wide between people and living things and the financial system. We could generate immense capital gains and wealth from healing and nurturing the environment. Global citizens could take responsibility to implement real change through the allocation of their time and resources.

I say this to emphasize how important I believe a healthy environment is for all life—including yours and mine.

Our environmental problems are symptoms of an invisible governance system, which has a different map of reality than we do and appears to have different goals than ours. It has purposely engineered our accounting and information systems to ensure central control. If we are to change how we manage and interact with our environment, then first we must illuminate and evolve our governance system, and with it our accounting, information, and financial systems.

Consequently, I am often challenged trying to have an intelligent conversation with people passionate about the environment who are in a state of panic about this or that environmental issue or problem. What I often hear is that they are eager to generate more cost for people and families and more wealth and power of the invisible governance system. This, they feel, is not a problem since everything is such an emergency. . . .
https://home.solari.com/an-intelligent- ... vironment/
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