Helping Asian Wealth Management Communities interact

Asian Wealth Management Forum 2019 SG - Exclusive Insights - Valentin Laiseca - 2

Valentin Laiseca of MSCI

May 29, 2019

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1. Is there any evidence that investing in ESG investment products delivers additional performance?

Video transcript

1. Is there any evidence that investing in ESG investment products delivers additional performance?

We work with some wealth managers already in Asia, where they have used our indices as the basis for structured products in different ways, in different forms. It could Be Delta 1 nodes, or out-performance calls. And, the reason they find it attractive is not so much the ethical reason, but more the out-performance reason. So, out of all the different ESG indices that MSCI produces, I think we can confidently say that the large majority of them tend to outperform their market cap index. That provides great opportunities for wealth management firms to use those indices as the basis for products that tend to outperform, and as such, this a great marketing tool for them as well. The out-performance is absolutely critical. The ethical pole is no longer enough, you have to show indices that outperform. This out-performance tends to be more obvious in emerging market and Asia, and we think the reason for that is because in emerging markets and Asia, you'll find more dispersion between good quality issue companies, and bad quality issue companies. While in markets such as Europe and US, the ESG standards are more standardised.