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Responsibility & Stewardship
EOS Stewardship Services
Responsibility & Stewardship
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New research shows Covid has accelerated the social awakening
New research from the Global Equities team at the international business of Federated Hermes shows that companies with good or improving social practices can potentially add up to 17bps each month to returns.
12/01/2021 - Lewis Grant
Five misconceptions of company engagement
"Add a short extract from this post, that is 10-15 words."
31/03/2019 - Will Pomroy
Is online shopping still in its prime?
In a few short years, Black Friday and Cyber Monday have been ingrained in the European retail calendar with outlets publicising their deals days or even weeks in advance. Gone are the days of hordes of consumers queuing outside shopping centres at 4am in a desperate bid to have their first pick of the sales with only a quarter of all Black Friday spending expected to take place in stores1. The queues have instead moved online, swapping the fresh air and elbowing for a comfortable chair, broadband connection and a few clicks of a mouse. With fears of oversaturation, Chi Chan, European Equities Portfolio Manager, asks whether the online market is still in its prime and identifies three companies involved in the online revolution.
26/11/2018 - Chi Chan
Looking into 2019 with Hermes
Hermes ESG Shows Social Rising
Companies with good or improving social characteristics have tended to outperform their lower-ranked peers on average by 15bps per month, according to new research from the Global Equities team at Hermes Investment Management.
13/11/2018 - Geir Lode
Short-term Volatility Masks Underlying Strength In EM
The tailwinds supporting emerging markets (EM) through the early part of the year gave way to headwinds and headlines of trade disputes, spiralling currencies and declining growth rates over the summer. In his latest note, Gary Greenberg, Head of Emerging Markets at Hermes Investment Management, explores the macro fundamentals underpinning the EM business environment, which remain more robust than the recent volatility might suggest.
30/10/2018 - Gary Greenberg
Five reasons why we are bullish on Japan
China’s transition from export powerhouse to data dragon
Hermes Investment Management, the £29.8 billion manager focused on delivering superior, sustainable, risk adjusted returns to its clients – responsibly, announces that planning consent has been granted for its brand new office development and multi-storey car park in Edinburgh’s city centre.
16/08/2017 - Gary Greenberg
Five reasons to keep faith in the US
Amid fears of an overheated market and uncertainty around Trump’s presidency, Mark Sherlock, Lead Portfolio Manager of the Hermes US SMID Equity Fund, believes there are still great investment opportunities to be found in the US small and midcap space. A market driven by fundamentals Year-to-date the Russell 2500 has returned circa 5.0% (compared with c9% for the S&P 500 Index). At a sector level, there has been a rotation out of some of the beneficiaries of the so-called “Trump trade” (banks, industrials) into parts of the market (healthcare, technology) which relatively underperformed in the post-election euphoria of Trump’s pro-growth policies. This rotation reflected the weaker economic data coming through in February and March and acknowledged a realisation that many of Trump’s policies are controversial and will likely require compromise. At the same time an improving European economy and Macron’s victory in the French Presidential election have seen investor interest switching from the US. These factors make for a better set up for the asset class- a market driven by fundamentals rather than one based on the expectation of political stimulus.
17/07/2017 - Mark Sherlock
Uncovering hidden technologies
Lewis Grant, Senior Portfolio Manager, Global Equities, at Hermes Investment Management, highlights the technology companies hiding behind the glitz and glamour of consumer-facing stocks. While the New Year kicked off in the UK with grey skies and drizzle in the air, in Las Vegas the glitz and glamour of the CES technology show rolled into town. Amongst the razzmatazz of big budget, ground breaking VR products it is easy for investors to become distracted, however, we look beyond the sequins to discover the hidden technologies behind the futuristic gadgets we see at these shows.
15/02/2017 - Lewis Grant
The stocks powering India’s true emergence
At Hermes we have long held the belief that the financial system should operate in the interests of its ultimate asset owners, not its various agents.
08/02/2017 - Gary Greenberg
Brexit – has the fog lifted?
After Theresa May’s explanation of the Brexit process and The Supreme Court ruling, the UK’s intended departure date and destination look clearer. But, in his latest Ahead of the Curve monthly, Neil Williams, Group Chief Economist at Hermes Investment Management, believes the largest uncertainty now is the length of the journey ahead. Our negotiations, he argues, could stretch well beyond the two years assumed by Article 50.
06/02/2017 - Neil Williams
India – the last real emerging market
In their latest Gemologist publication, Gary Greenberg, Head of Emerging Markets and Kunjal Gala, Senior Analyst, assess India’s ability to modernise and truly emerge. “The futuristic architecture and glass towers of Shanghai and Seoul defy old stereotypes about emerging markets. But investors heading into Mumbai from the airport, confronted with searing poverty and pollution, could be forgiven for questioning the talk of Asia’s economic miracle taking root in India. We would encourage them to take a broader view: although corruption and inequality remain endemic, there are signs of profound long-term change.”
23/01/2017 - Gary Greenberg
Will markets stay on board the Trump-train in the long-term?
As the world awaits the inauguration of the 45th President of the United States later today, Geir Lode, Head of Global Equities at Hermes Investment Management, discusses what investors have learnt about Donald Trump’s plans since his surprise election in November. Ahead of the US elections, many investors viewed a Trump victory negatively and markets reacted accordingly, falling sharply in the immediate aftermath of the result. Trump was viewed as a challenge to the world order, a threat to the system that many investors had expected to continue in perpetuity. However it took mere hours for the sentiment to shift as investors began to anticipate a fiscal splurge, with pro-growth policies and a business-first stance viewed as beneficial for the earnings of US companies. The optimism has extended beyond investors, with US consumer sentiment also reacting favourably to the new President-elect.
20/01/2017 - Geir Lode
Reaction to the US Fed – its only second rate hike in over a decade
Neil Williams, Group Chief Economist: Today’s US Fed rate hike, to 0.75%, was so well telegraphed it should be largely ‘baked into’ asset prices. The move confirms the Fed will remain the test case for whether any central bank can ‘normalise’ rates. We expect it to try, but fail, with the funds target peaking out in 2017 at just 1% – way lower than the near 3% in the Fed’s own ‘dot plot’ rate assumptions. Admittedly, monetary policy in 2017 will play second fiddle to politics, once Mr Trump’s new administration gets its feet under the table in January. But, even the volatility that could accompany a Trump-led paradigm shift does not point to an aggressive Fed.
14/12/2016 - Neil Williams
Why boring can be beautiful for long-term investors
The lure of exciting ‘blue-sky’ stocks is understandable. Visionary companies like Tesla have the potential to generate enormous returns, if they can harness and monetise innovative ideas. Unfortunately, these types of stocks also carry considerable risks. Value is often intangible and unsupported by near-term earnings, while P/E multiples can be dizzying. Furthermore, investors may face stock dilution in the event of further rounds of fundraising, says Chi Chan, European Equities Portfolio Manager at Hermes Investment Management.
12/12/2016 - Chi Chan
Analysis of the impacts of exclusion lists show the devil is in the detail
Institutional investors need a greater understanding and education of exclusion lists due to varied and numerous ramifications, according to a new paper by Hermes Investment Management, the £28.6 billion manager focused on delivering superior, sustainable, risk adjusted returns to its clients – responsibly. The report from the firm’s Global Equities team, From faith to fact in ESG exclusions: a behind-the-scenes analysis, models four different approaches to excluding holdings with climate change concerns, while ostensibly meeting the same goal: to produce diverse risk and performance outcomes.
07/12/2016 - Lewis Grant
South Africa – time to breathe…and to change
While South Africa’s market performance has been unremarkable so far in 2016, political and economic events within the country have been more dramatic. Elena Tedesco, Co-Portfolio Manager – ESG Strategies, on the Emerging Markets team at Hermes Investment Management, discusses the ongoing challenges and opportunities in a nation facing significant upheaval. South Africa has performed broadly in line with the rest of the emerging markets this year (see Figure 1). Yet delve deeper and it is clear that the country and its economy have had a much more turbulent year.
A bout of volatility is what the market needed
With many indices now labelled bear markets after a traumatic start to the year, Andrew Parry, Head of Equities notes it is important to recognise that long-term investment returns are gradually rising, not falling, and that an adjustment was needed, as global quantitative easing had led to elevated valuations in most asset markets. US rates more influential than China turbulence: Previously, we have said that elevated volatility was the only market prediction that we were certain about. We maintain this view largely because of the “denominator problem”: with official rates hovering near zero and longer term rates suppressed, small changes in interest rate expectations can lead to significant swings in asset prices.
Johnny Weir, Head of Corporate Communications
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Rachael Dowers, Manager - Corporate Communications
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+44 (0)20 7680 2362