This information policy explains how Easyvest integrates sustainability in its investment policy and in its portfolio management service.
Safeguarding economic, environmental and social resources is a prerequisite for a healthy economy and the generation of attractive returns in the future. We strongly support the change in the investment industry: the shift from wealth creation to the creation of wealth and well-being.
Easyvest's mission is to enable its clients to achieve their financial financial goals through short, medium and long term investment solutions. Sustainable development is essential to fulfill this obligation. We are convinced that the companies we invest in that have sustainable business practices have a competitive advantage and perform better in the long term. We also believe that sustainability has the power to drive positive economic environmental and social change.
The Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (hereinafter the "SFDR") requires Easyvest to be transparent about the consideration of negative impacts of investment decisions on sustainability factors.
Easyvest's approach to sustainable and responsible investment must be analyzed in the light of its be analyzed in the light of its activities and particularities.
Generally speaking, there are two main categories of socially responsible investment strategies: so-called "exclusionary" strategies "exclusionary" or "activist" strategies.
An exclusionary strategy consists of excluding certain sectors of activity on the basis of environmental, social or governance criteria, i.e. the so-called "ESG" criteria. This type of strategy can be applied in several ways ways:
"Sectoral" strategies that exclude entire sectors of activity (e.g. fossil fuels, tobacco, armaments);
"Best-in-class" strategies, which consist of selecting companies or countries that have the best ESG ratings, and exclude all others;
"Thematic" strategies, which consist of investing in a specific social or environmental criterion (e.g. water, renewable energy, health);
"Impact investment" strategies, which consist in selecting companies that have a positive impact on society and/or the environment;
The "normative control" strategies, which consist of selecting companies or countries that meet international standards for environmental, social and governance imperatives.
Easyvest advocates a proven investment methodology to grow your money. This methodology does not aim at selecting a limited number of specific stocks and does not try to beat the market. It simply follow the market, ignoring the predictions of financial gurus, and focusing on the growth of your money over the long term. This approach is simple, proven and conservative. It is not It's not sexy, but in the long run, it's extremely effective.
This methodology is based on the modern portfolio theory established by Nobel Prize-winning economist Harry Markowitz. It was developed by Matthieu Remy, co-founder of Easyvest, at the Harvard Business School with the help of world-renowned financial experts.
When it comes to investing in the stock market, we consider that it is extremely difficult to beat the average market return over the long term. Rather than spending resources trying to find the "right" stock, we prefer to buy diversified stock and bond funds that follow the trend of the overall stock market.
Easyvest's portfolio is managed exclusively through trackers, i.e. investment funds that have the particularity of tracking the performance of a stock market index by investing in the basket of shares of stocks and/or bonds that make up the index.
Hundreds, if not thousands, of trackers are available on the financial markets. To select which ones will be placed in your portfolio, Easyvest uses many criteria:
The tracker must follow an index that fits with the company's investment strategy. For example, an index that represents all listed stocks in the world or all government debt in the Eurozone;
The tracker must be issued in euros, as this is the reference currency for our our clients. Ideally, the tracker should be tradable on an exchange where transaction costs are not prohibitive, typically on Euronext. The tax structure of the fund (eg. capitalization vs. distribution) will also be taken into account, in order to reduce the total cost for the client;
Easyvest selects funds from reputable issuers, with multiple market makers, low fees and low tracking error;
The tracker must have a respectable size, ideally greater than one hundred million, a track record of performance ideally greater than three years and sufficient historical liquidity with an absolute spread between the buy and sell price ideally below 0.5%;
The tracker must be monitored by at least one ESG rating agency, or a sustainability score can be calculated by Easyvest or a third party, in order to monitor periodically the sustainability performance of the tracker.
Article 2 of the SFDR defines sustainability risk as "an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment".
First, as a general risk mitigator, Easyvest believes that the best way to mitigate sustainability risks is to broadly diversify portfolios. This is precisely what Easyvest does by investing in diversified trackers.
In addition, Easyvest ensures that the tracker fund managers in which it invests are actively committed to the respect of international environmental imperatives, social awareness and good governance. For example, Easyvest checks whether the managers are signatories of the United Nations Global Compact and the United Nations Principles for Sustainable Investment.
Finally, Easyvest checks the commitment to sustainability. In concrete terms, Easyvest checks that tracker fund managers actively engage on sustainability issues with the companies in which they invest and exercise their right to vote at general meetings. These fund managers report on this engagement on an annual basis and sometimes on an ad hoc basis. Where appropriate, we can ask the fund managers about their concrete commitment to sustainability.
These various controls are carried out (i) at the time of fund selection and (ii) as part of their annual monitoring.
For example, as of March 28, 2022, the global equity fund in which Easyvest invests in has an overall rating of 7/10 from Refinitiv, an independent ESG rating agency. In addition, the ultimate manager of this fund, State Street, regularly reports on how it conducts its socially responsible activism. For example, in May 2021, State Street voted to appoint two directors to the board of Exxon Mobil, a major oil company, whose mission is to ensure the transition to more sustainable energy sources.
The Executive Committee shall review annually the need to update this policy.
The Risk Manager is responsible for enforcing this policy within the company.