Best Aussie Ethical ETFs Compared + More
Is Stagflation Here? + Board Diversity Improves Down Under
October 22nd, 2021.
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🚨 New Article 🚨
This article services as a sequel to my Global ethical ETF comparison of ETHI, ESGI and VESG.In this write-up, I've decided to turn my focus locally by unpacking 3 of The Best Aussie ESG ETFs: FAIR vs VETH vs GRNV for those of you considering domestically based ethical investing options.
Broadly speaking FAIR, VETH and GRNV all seek to provide investors with more access to Australian companies with solid ESG practices in place, while reducing exposure to companies doing the opposite. However, the devil is always in the detail.
You can read my analysis of FAIR vs VETH vs GRNV using the link below ⬇️
What Caught My 👀 This Week
Netflix added 4.4 million net new subscribers in Q3, boosting its global total to an eye watering 213.6 million.
#From Around The Web
Aussie Companies Add Most Women To Boards
ESG investing is a multifaceted concept, and shouldn't be strictly aligned with companies doing their part to fight climate change, although that is a big part of it.
ESG (Environmental, Social, Governance) frameworks also consider companies leading the way on key social, and governance issues.
For example, Betashares Aussie ESG ETF, FAIR only includes companies addressing the social issue of gender diversity on boards when selecting the underlying holdings of the ETF.
Australian companies have historically been pretty slack at addressing the board diversity issue, but I'm happy to share some good news on that front.
This week Bloomberg reported that women held eight more board seats on companies in the S&P/ASX 200 Index in September compared to August increasing the percentage of Female directors from 33.7% to 34%.
That puts the ASX 200 above the 30.2% of women on boards in S&P 500 companies and below the 37% in Stoxx 600 European companies. While this is welcome news, there is still a lot of work that needs to happen in the area. Especially when it comes to the national gender pay gap, which is sitting at 14.2%, up from 13.4% in 2020. This article from Bloomberg digs deeper into the state of play on this issue and calls out the companies getting it right, and those getting it wrong.
Is Stagflation Back?
In a nutshell, stagflation refers to a period of stagnation in economic growth coupled with high inflation.
The 70s were famous for a persistent period of stagflation triggered by an unusual concoction of events. Namely, U.S. President Nixon took America off the Gold Standard combined with soaring oil prices thanks to an embargo, leading to companies charging more, and producing less. It took some painful interest rate rises over a number of years for the worlds largest economy at the time to shake it off.
Fast forward to today and the possibility of stagflation rearing its head has been a hot topic of conversation in financial circles this week after the U.S reported an annual inflation rate of 5.4% in September 2021. This was predominantly triggered as a result of supply chains continuing to struggle to keep up with strong demand as economies emerge out of Covid-19.
For context, a 5.4% inflation rate is almost triple the Federal reserves target of 2% and registers a 13-year high inflation rate. The consensus among experts this year has been that inflation will be transitionary, although some believe it will linger.
This article from Livewire markets compares the bout of stagflation experienced in the 70s with the current state of play and provides a rationale for why stagflation won't stick around, or arrive at all.
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