10 Things You Should Know About  Sustainable Investing. From HartfordFunds

10 Things You Should Know About Sustainable Investing. From HartfordFunds

10 Things You Should Know About Sustainable Investing. By: Hartford Funds

Sustainable investing is becoming more mainstream. Here are some key things to consider.

Sustainable Investing

  1. Terminologies May Differ – There are many approaches under the sustainable-investing umbrella.
    Examples include socially responsible investing (SRI); environmental, social, and governance (ESG)
    integration; and impact investing. There isn’t currently a uniform definition of these terms and different
    asset managers may define them differently.
  2. Socially Responsible Investing (SRI) or Exclusionary Investing – The modern version of the term SRI has
    its roots in the 1960s and aims to avoid what some consider to be socially “bad” companies (think tobacco
    companies or casinos).
  3. Environmental, Social, and Governance (ESG) – ESG criteria are a way to evaluate how a company behaves.
    For example, environmental standards can measure how a company treats natural resources; social
    standards can evaluate how a company manages relationships with its community; and governance criteria
    can focus on issues such as recruiting women and minorities for the board
  4. ESG in Action – The emphasis placed on ESG criteria varies across funds. Some funds may view ESG factors
    as one consideration among many as they make their investment decisions. Other funds may demonstrate a
    higher level of commitment to ESG investing by making it a key consideration in their investment decisions.
  5. Impact Investing – This strategy generally involves seeking to generate positive, measurable, reportable
    social and/or environmental impact alongside a financial return. For example, an “impact” fund may invest
    in companies that strive to make the world a better place, such as renewable power-generation company, a
    water-treatment facility, or a company that seeks to eradicate a disease.
  6. Performance Matters – Sustainable funds ”comfortably outperformed their peers” in 2020.1 Further
    diminishing lingering assumptions that sustainable investment strategies will underperform, 35% of
    sustainable funds finished in the top quartile of their Morningstar Categories and 66% in the top half.
  7. Not Just for Millennials – Contrary to popular opinion, many investors across all ages feel positively about
    a sustainable portfolio: 44% of people age 71+ as well as 60% of people age 18-37 rated it favorably.
  8. Explosive Growth – Sustainable investing is growing in popularity. During the last decade, it’s become
    a mainstream strategy as opposed to an aspirational concept. In fact, $17.1 trillion was invested in
    sustainable-investing strategies in the US at the beginning of 2020, up 42% from just two years prior.
  9. Something to Talk About – A recent study found the top three issues for asset managers and their
    institutional clients are climate change/carbon, sustainable natural resources/agriculture, and board
    governance.3 Your list may be quite different. Talk to your financial professional about the causes you
    support or issues that concern you.
  10. Changing Perceptions – Despite some lingering reservations about sustainable investing, 57% of people
    say they would feel optimistic about incorporating sustainable funds into their portfolio. Many of
    those who felt positively attribute this to the positive environmental impact pursued by some sustainable strategies.


Getting to Net Zero. From BlackRock

Getting to Net Zero. From BlackRock

Getting to Net Zero by BlackRock

1. What is a net zero economy and why do we need it?

Achieving a net zero economy means drastically reducing emissions by 2050, with the goal of limiting temperature increases to 1.5°C above pre-industrial levels. In order to have a 50% probability of meeting that goal, the world must achieve net zero carbon dioxide emissions by 2050 and net zero emissions of all other greenhouse gases by approximately 2070. Limiting global warming to 1.5°C is the higher aim of the Paris Agreement and is necessary in order to mitigate the most severe long-term economic consequences of climate change. Reaching net zero requires a complete transformation of the global economy. To get there, we need to replace fossil fuels as the economy’s primary energy source, which provide 84% of the world’s energy, with low carbon sources such as wind and solar.

2. What is “temperature alignment?” How do you measure it?

“Temperature alignment” reflects how closely aligned a business, government, or portfolio is to a 2050 net zero economy. Temperature alignment is a forward-looking measurement. In other words, it is measured by looking at emissions today as well as the potential of the emitter to reduce their emissions. In order to measure temperature alignment, one approach is to look at the role a company plays in the economy today and use all available information to assess its expected emissions trajectory out to 2050. We then measure what the world would look like in 2050 if the global economy moved at that same speed to reduce emissions. For example, an oil company today – one that lacks a solid transition plan to net zero – might have a temperature alignment of more than 5ºC. If all companies in the global economy had a similar commitment, we would expect a global temperature rise of more than 5ºC. By contrast, an oil company with a solid transition plan might be measured at 2ºC or below, for the same reasons. This approach helps us provide an alignment measurement for companies of varying sizes. For example, a very small coal mining company or a very large oil producer would both have high temperature alignments. That’s because if the whole energy sector resembled either of those companies in 2050, we would see a significant rise in global temperatures.

3. Why does net zero matter for investors?

Climate risk is investment risk. Companies face two key risks – physical risk and transition risk. As policymakers, regulators, and consumers accelerate the transition to a net zero economy, companies that are not prepared for this transition – i.e., companies that will remain dependent on producing or consuming fossil fuels for too long – risk being left behind by their consumers and shareholders. But the transition to net zero also presents a significant investment opportunity. We believe companies that are best prepared for the transition will provide better long-term returns, as they will be better able to function in an economy that looks vastly different from today’s. We believe that markets are not fully pricing in climate considerations into the value of securities. Investors who factor in transition risks and opportunities will likely benefit from an accelerating reallocation of capital to sustainable companies.

4. What can investors do today to address risks and capture opportunities as the world moves to a net zero economy?

There are several considerations investors can take into account to better align their portfolios with the transition to a net zero economy, and it may take a combination of the below approaches to build an entire portfolio that is progressing toward a net zero-aligned pathway.

1. Holistically address portfolios by replacing core exposures:
Reduce – reduce a portfolio’s exposure to the highest carbon emitters, or companies not taking climate actions based on forward-looking commitments. BlackRock has established a “heightened scrutiny model” for companies that are insufficiently prepared for the net zero transition and have low reception to investment stewardship.
Prioritize – allocate capital based on companies’ actions to transition, such as companies reducing
their reliance on fossil fuels, publishing transition plans and setting science-based targets.

2. Focus on a particular part of the portfolio:
Target – invest in a specific sustainable economic activity, such as clean energy, or investments directly tied to projects that advance environmental purposes, such as green bonds.

3. Integrate data and tools that measure temperature alignment:
Overlay – use latest research and data that measures temperature alignment for issuers and investments. Investors can integrate the temperature alignment data into investment processes alongside traditional financial data.

4. Use votes and engagements to change behavior:
Engage – asset managers can use investment stewardship to ensure companies are mitigating climate risks and considering the opportunities presented by the net zero transition.


Always the Season. From Statera

Always the Season. From Statera

Always the Season by Statera Asset Management

Each spring, we hear echoes of a favorite line among many market watchers: the months of May through October
have proved the worst of all in terms of return for U.S. investors, so better to watch out. Perhaps even cut and
run. Among other such compartmentalizations of historical returns, the goal presumably is to show that there
are ways to profitably time exposure to the market. Let it be known that we’ve yet to see such a review
consistent enough to warrant a drift from our long-term approach to investing.

–   It’s true that the months of May through October seem to have been less favorable from a total return
standpoint over the years
–   The return is still positive, however, just less so than during other months of the year
–   The upshot is that remaining invested throughout the year still has proved a more fruitful strategy than
attempting to time market move

Sell in May and Go Away?

It’s a well-worn mantra in stock circles that the months between April and November might best be avoided. And
market history for a time suggested investors might have been better off had they taken heed. But since the close of
World War II, those following the refrain might have been disappointed. Sure, the cumulative long-term returns for
U.S. stocks (as proxied by the S&P 500 Index) from the months that include May through October remain the worst
of any consecutive six-month combination. And six of the ten-worst single-day declines in the S&P 500 have occurred
in those months. However, looked at another way, as we do in Figure 1, that returns from May through October are
on average worse than those during the other six months of the year is a fact without much consequence. Who cares
that the returns are lower? They’re still positive.

And that means that investors might have been better off by remaining invested throughout the year. And by better off,
we mean substantially so. Thanks to the “miracle of compounding,” even what seems like relatively meager additional
gains of 2.9% per year over the May-October period may have helped to build wealth over time. An investor who sat
tight might have generated a total return of 11.6% per year since the beginning of the 1950s, much better than the
8.4% return generated when one invested in only the “best” six-month period of the year.

Getting the Full Picture

This is another fine example of market legend that potentially leads investors to make poor choices regarding long-term
financial plans. The way the story often is offered, it may leave the impression that returns are negative, on average,
across the May-October period. And folks might react “accordingly”. As we’ve shown, though, returns are meaningfully
positive over those months, too.

Markets have become a good bit more volatile seemingly in light of concerns with regard to global inflation trends,
challenges within China’s real estate sector, politicking over the U.S. national debt, insecurities around energy
availability through the winter, and the stability of the Federal Reserve Board membership. Songs with rhymes like the
one that prompted this note likely will grow louder. But we caution readers that, unless individual financial
circumstances have changed greatly over the medium-term, it’s often been the better course to remain true to an
existing investment plan, rather than joining in with the time-the-market chorus.

Important Information

Statera Asset Management is a dba of Signature Resources Capital Management, LLC (SRCM), which is a Registered Investment Advisor. Registration of
an investment adviser does not imply any specific level of skill or training. The information contained herein has been prepared solely for informational
purposes and is not an offer to buy or sell any security or to participate in any trading strategy. Any decision to utilize the services described herein should
be made after reviewing such definitive investment management agreement and SRCM’s Form ADV Part 2A and 2Bs and conducting such due diligence
as the client deems necessary and consulting the client’s own legal, accounting and tax advisors in order to make an independent determination of the
suitability and consequences of SRCM services. Any portfolio with SRCM involves significant risk, including a complete loss of capital. The applicable
definitive investment management agreement and Form ADV Part 2 contains a more thorough discussion of risk and conflict, which should be carefully
reviewed prior to making any investment decision. Please contact your investment adviser representative to obtain a copy of Form ADV Part 2. All data
presented herein is unaudited, subject to revision by SRCM, and is provided solely as a guide to current expectations.

The opinions expressed herein are those of SRCM as of the date of writing and are subject to change. The material is based on SRCM proprietary research
and analysis of global markets and investing. The information and/or analysis contained in this material have been compiled, or arrived at, from sources
believed to be reliable; however, SRCM does not make any representation as to their accuracy or completeness and does not accept liability for any loss
arising from the use hereof. Some internally generated information may be considered theoretical in nature and is subject to inherent limitations
associated thereby. Any market exposures referenced may or may not be represented in portfolios of clients of SRCM or its affiliates, and do not represent
all securities purchased, sold or recommended for client accounts. The reader should not assume that any investments in market exposures identified
or described were or will be profitable. The information in this material may contain projections or other forward-looking statements regarding future
events, targets or expectations, and are current as of the date indicated. There is no assurance that such events or targets will be achieved. Thus,
potential outcomes may be significantly different. This material is not intended as and should not be used to provide investment advice and is not an
offer to sell a security or a solicitation or an offer, or a recommendation, to buy a security. Investors should consult with an advisor to determine the
appropriate investment vehicle.

The S&P 500 Index measures the performance of the large-cap segment of the U.S. equity market.

The Bloomberg US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate
taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS
(agency and non-agency).

One cannot invest directly in an index. Index performance does not reflect the expenses associated with the management of an actual portfolio.
Investing in any investment vehicle carries risk, including the possible loss of principal, and there can be no assurance that any investment strategy will
provide positive performance over a period of time. The asset classes and/or investment strategies described in this publication may not be suitable for
all investors. Investment decisions should be made based on the investor’s specific financial needs and objectives, goals, time horizon, tax liability and
risk tolerance.


Fixed-Income Investors Warily Eye Congress and the Fed. From Hartford Funds

Fixed-Income Investors Warily Eye Congress and the Fed. From Hartford Funds


Fixed-Income Investors Warily Eye Congress and the Fed:

Ample monetary and fiscal stimulus has kept fixed-income investors optimistic. But what if that support fades? From HartfordFunds



From rising inflation to the COVID-19 Delta variant and more, there is no shortage of risks and challenges facing investors in today’s global market landscape. But from our perspective, many fixed-income market participants have been more or less looking past such macro concerns in favor of a more upbeat narrative around continued economic recovery and growth. This narrative has gained ample support from the global trend of ongoing monetary and fiscal policy stimulus, particularly in the US, since the onset of COVID-19. What happens in Washington doesn’t stay in Washington.

With that in mind, let’s examine the key US government policy catalysts that have been moving fixed-income markets in recent months and may continue to do so in the period ahead.


US Monetary Policy

The US Federal Reserve’s (Fed’s) September 21–22 Federal Open Market Committee (FOMC) meeting and accompanying statement, followed by Fed Chair Jerome Powell’s press conference, finally gave investors some much-needed clarity around the potential start date and pace of Fed tapering.

Essentially, the FOMC indicated that the Fed expects to begin winding down its large-scale asset-purchase program in November 2021—sooner than most market participants had anticipated—and could then complete the tapering process as early as mid-2022. (However, the Fed of course retains flexibility to postpone or slow tapering in response to evolving inflationary and other economic or market conditions). Importantly, regarding short-term interest rates, Chair Powell seems to have expressly de-linked tapering from the timing of when the Fed may begin to raise the federal funds rate. In other words, just because tapering commences does not necessarily mean that rate hikes will happen immediately (or even soon) thereafter.

Naturally, fixed-income market participants will be keeping a close eye on Fed-related developments, both its words and its actions, in the coming weeks and months.

US fiscal policy appears to have entered an era of greater government spending, which may spur higher inflation and help drive fixed-income markets going forward.


US Spending Bills


In August, the US Senate overwhelmingly approved President Biden’s US$1 trillion spending package to rebuild and upgrade the nation’s aging infrastructure and to fund new climate resilience and other initiatives. The bipartisan bill must now pass the US House of Representatives, which seems probable at this juncture, before it can be enacted into law. (For more on the Biden administration’s infrastructure plans, see A Revival in US Investment Spending: Implications of the Biden Infrastructure Plan, authored by our colleague, US Macro Strategist Juhi Dhawan).

In addition, and perhaps even more critically, the Senate is currently working on a multi-trillion dollar budget resolution that is heavy on so-called human infrastructure and may be able to clear that chamber by way of congressional reconciliation (a simple majority vote). Along with the above-referenced infrastructure bill, this illustrates how US fiscal policy appears to have entered an era of greater government spending, which may spur higher inflation and help drive fixed-income markets going forward.

Meanwhile, September was marked by multiple US “fiscal cliffs”: Extended unemployment benefits expired, the federal eviction moratorium was lifted, and expanded SNAP benefits are falling off. The hard-to-answer question here is, how well will the US economy transition toward earned income sustaining consumers as these fiscal transfers fade?

US lawmakers may once again find a way to raise the debt ceiling, but the near-term path to that hoped-for outcome could be rocky.

The US Debt Ceiling


Concerns about the US federal debt limit are mounting as Congress prepares for a high-stakes showdown over raising this debt ceiling ahead of a mid-late October deadline—the approximate date by which the government could exhaust the extraordinary funding mechanisms that allow it to stay below the statutory debt limit. While unlikely, failure to raise the debt ceiling in time would imply selective government-debt default, potentially leading to an array of negative economic and market consequences. Moreover, if a federal government shutdown occurs (even for a short period), the collapse of debt-ceiling negotiations would delay delivery of any further US fiscal stimulus measures.

US lawmakers may once again find a way to raise the debt ceiling, but the near-term path to that hoped-for outcome could be rocky and negotiations may go down to the wire. In the interim, debt-ceiling worries and related political brinksmanship have already created some fixed-income distortions, notably at the front end of the Treasury bill market. Similar market dislocations and volatility took place amid the debt-ceiling battle of 2011, when doubts around government creditworthiness led Standard & Poors to strip US sovereign debt of its AAA credit rating.


Investment Implications


  • A somewhat more hawkish Fed makes us aware of interest-rate volatility, particularly on the front end and belly of the yield curve.1
  • Passage of both the bipartisan infrastructure bill and the reconciliation bill would likely be positive for spread2 and risk products, as additional fiscal stimulus would serve as a tailwind during the recovery.
  • A debt ceiling-led default, while unlikely, is one that could have profound impacts on risk assets3 and market functioning. Even the ratings downgrade that took place in 2011 was enough to trigger a sharp sell-off in risk assets during that summer. Market participants are seeking clarity on the exact path on how this issue is resolved before the Treasury runs out of extraordinary measures.
  • Also, with midterm elections slated for next year, even if the Biden administration pushes through many parts of its proposed agenda, Republicans will likely point to rising US debt as a major issue in the 2022 midterm elections.

1 A yield curve is a line that plots yields (interest rates) of bonds having equal credit quality but differing maturity dates. The slope of the yield curve gives an idea of future interest rate changes and economic activity.

2 Spreads are the difference in yields between two fixed-income securities with the same maturity, but originating from different investment sectors.

3 Risk assets refers to assets that have a significant degree of price volatility, such as equities, commodities, high-yield bonds, real estate, and currencies.

The views expressed here are those of the authors. They should not be construed as investment advice. They are based on available information and are subject to change without notice. Portfolio positioning is at the discretion of the individual portfolio management teams; individual portfolio management teams, and different fund sub-advisers, may hold different views and may make different investment decisions for different clients or portfolios. This material and/or its contents are current as of the time of writing and may not be reproduced or distributed in whole or in part, for any purpose, without the express written consent of Wellington Management or Hartford Funds. 

Important Risks: Investing involves risk, including the possible loss of principal. • Fixed-income security risks include credit, liquidity, call, duration, and interest-rate risk. As interest rates rise, bond prices generally fall.


6 Tips To Navigate Volatile Markets. From Fidelity

6 Tips To Navigate Volatile Markets. From Fidelity


6 tips to navigate volatile markets: When markets get choppy, it pays to have an investing plan and to stick to it. by Fidelity Viewpoints


1. Keep perspective: Downturns are normal and typically short
• Market downturns may be unsettling, but history shows stocks have recovered and delivered long-term gains.
• Over the past 35 years, the stock market has fallen 14% on average from high to low each year, but still managed gains in 80% of calendar years.

Past performance is no guarantee of future results. See footnote 1 for details.

2. Get a plan you can live with – through market ups and downs
• Your mix of stocks, bonds and short-term investments will determine your potential returns, but
also the likely swings in your portfolio.
• Pick an investment mix that aligns with your goals, timeframe, and financial situation, and you can
stick with despite market volatility.

Past performance is no guarantee of future results. Data source: Morningstar, Inc., 2019 (1929-2018). See footnote 2 for details.

3. Focus on time in the market – not trying to time the market
• It can be tempting to try to sell out of stocks to avoid downturns, but it’s hard to time it right.
• If you sell and are still on the sidelines during a recovery, it can be difficult to catch up. Missing even
a few of the best days in the market can significantly undermine your performance.


Past performance is no guarantee of future results. Source: FMRCo, Asset Allocation Research Team, as of January 1, 2019. See
footnote 3 for details.

4. Invest consistently, even in bad times
• Some of the best times to buy stocks have been when things seemed the worst.
• Consistent investing can give you the discipline to buy stocks when they are at their cheapest.
• Consider setting a plan for automatic investments.

Past performance is no guarantee of future results. Sources: Ibbotson, Factset, FMRCo, Asset Allocation Research Team as of
January 1, 2019. See footnote 4 for details.

5. Get help to make the most of a down market
• While no one likes to lose money, your financial advisor may be able to help you take advantage of a
down market.
• Tax rules may let you use losses on some of your investments to reduce your future tax bills, or use
lower share prices to convert to a Roth IRA at a lower tax cost.
• Down markets may also be a good time to meet with your advisor to discuss adjusting your
investment mix, or taking advantage of opportunities when prices are low.

6. Consider a hands-off approach
• If you are not comfortable with market risk, consider turning your portfolio over to a professional
through a managed account or all-in-1 mutual fund.
• If you don’t have a strategy, or think yours may be off track, start planning now with our online
tools. Visit Fidelity’s Planning & Guidance Center today.

1. The S&P 500® Index is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and
industry group representation. S&P and S&P 500 are registered service marks of Standard & Poor’s Financial Services LLC. The
CBOE Dow Jones Volatility Index is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock
index option prices. You cannot invest directly in an index.
2. Returns include the reinvestment of dividends and other earnings. This chart is for illustrative purposes only and does not
represent actual or implied performance of any investment option. Stocks are represented by the Standard & Poor’s 500 Index
(S&P 500® Index). The S&P 500® Index is a market capitalization–weighted index of 500 common stocks chosen for market size,
liquidity, and industry group representation to represent US equity performance. Bonds are represented by the Bloomberg
Barclays US Intermediate Government Bond Index, which is an unmanaged index that includes the reinvestment of interest
income. Short-term instruments are represented by US Treasury bills, which are backed by the full faith and credit of the US
government. Indexes are unmanaged, and you cannot invest directly in an index. Foreign stocks are represented by the Morgan
Stanley Capital International Europe, Australasia, Far East Index for the period from 1970 to the last calendar year. Foreign
stocks prior to 1970 are represented by the S&P 500® Index. The purpose of the target asset mixes is to show how target asset
mixes may be created with different risk and return characteristics to help meet an investor’s goals. You should choose your
own investments based on your particular objectives and situation. Be sure to review your decisions periodically to make sure
they are still consistent with your goals.
3. The hypothetical example assumes an investment that tracks the returns of the S&P 500® Index and includes dividend
reinvestment but does not reflect the impact of taxes, which would lower these figures. There is volatility in the market, and a
sale at any point in time could result in a gain or loss. Your own investing experience will differ, including the possibility of loss.
You cannot invest directly in an index. The S&P 500® Index, a market capitalization–weighted index of common stocks, is a
registered trademark of The McGraw-Hill Companies, Inc., and has been licensed for use by Fidelity Distributors Corporation.
4. US stock market returns represented by total return of S&P 500® Index. It is not possible to invest in an index. First 3 dates
determined by best 5-year market return subsequent to the month shown.
This information is intended to be educational and is not tailored to the investment needs of any specific investor.
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or
tax advice. Consult an attorney or tax professional regarding your specific situation.
Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk.
Past performance is no guarantee of future results.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or
economic developments. Investing in stock involves risks, including the loss of principal.
Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market, or economic
developments, all of which are magnified in emerging markets. These risks are particularly significant for investments that focus
on a single country or region.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917