The coronavirus pandemic has changed the way we live in every way, including the way people are investing their money. Some stocks, such as Netflix or Zoom Video, have benefitted tremendously from people staying at home the past few months during pandemic lockdowns. On the other hand, stocks like retailers or airline companies saw their stocks plummet. However, as economies start to reopen, some of the worst-performing starts of March and April are set to make a come-back. Undoubtably, there will be a more long-lasting effect of the coronavirus pandemic on the economy and the market.
Investment Turning Point
The outbreak of the coronavirus pandemic could prove to be a major turning point for ESG investing. This investing approach evaluates a company’s environmental, social and governance ratings alongside the other traditional financial metrics. According to analysts and investors, the tragic deaths and destruction that the pandemic has left behind may encourage people to further prioritize investing with a conscience. Many of those investing into companies and stocks will heavily emphasize and scrutinize a corporations’ response to the pandemic in addition to their viability looking forward. The coronavirus pandemic has led to a massive increase in volunteering, social cohesion, community support and focus on the public good vs. private freedoms. This has also been witnessed during the peaceful protests for the Black Lives Matter movement that has united the world.
Sustainable Investment Funds
Sustainable investing funds attracted record inflows in the first quarter of this financial year, despite the coronavirus pandemic and subsequent market turmoil. Many of these funds are outperforming the broader market for the year. Some critics have suggested that ESG investing is merely a bull-market phenomenon. However, others argue that it represents a fundamental and long-lasting shift in investing culture.