HECO: Socially Responsible Investing Backed By Strong Earnings
Socially responsible investing combines the ambition to make money with the motivation to enact positive change in the world. It is a popular approach to finance that has been around for decades. However, in recent years, the concept has been catching on at an even faster pace.
Since 2017, global investments based on ethical and social principles have increased by 34% and reached $30.7 trillion. In the U.S. alone, one in every six dollars under professional asset management is invested using socially responsible financial strategies. New research from Morningstar suggests these trends will continue growing, as nearly three-fourths of all investors are at least “moderately interested” in devoting long-term savings to sustainable investments.
One selection following these investment objectives is the Strategy Shares EcoLogical Strategy Fund
To achieve these goals of sustainability, the Strategy Shares EcoLogical Strategy Fund focuses on companies that are components of recognized environmentally focused indices. Investment strategies apply strict criteria to identify global businesses with emerging projects positioned to benefit from ecologically conscious legislation and cultural shifts in market consumption.
During periods of normal market volatility, at least 80% of the portfolio allocation is devoted to green bonds, mutual funds, ETFs, equity, and fixed-income securities of ecologically-focused companies. At least 65% of total allocation is devoted to common stocks and fixed-income securities of ecologically-focused companies based in the U.S. The remaining portion of the allocation is devoted to ADRs and stocks connected to ecologically-focused businesses that are based outside the U.S.
The Strategy Shares EcoLogical Strategy Fund is broadly diversified across industry sectors and its positive outlook is supported by notable earnings results that have been generated during the market’s most recent reporting period.
During the first-quarter, casualty and property insurer Travelers Companies TRV beat the market’s consensus earnings forecasts on underwriting improvements and significant declines in catastrophe losses. Core earnings posted at $2.83 per share, with nearly $800 million in net income for the period.
The EPS figure indicates annualized gains of 17% and the performance surpassed analyst expectations ($2.72 per share) by 4.04%. The revenue figure indicated annualized gains of 5.2% (at $7.67 billion) and comfortably surpassed Wall Street’s estimates calling for revenues of $7.1 billion. Catastrophe losses dropped by 45.5% on an annualized basis (to $193 million) and written premiums rose to $7.06 billion (a gain of 3.5%). Shares of Travelers Companies stock currently show YTD gains of 23.54%.
Another market sector that continues to generate enhanced returns can be found in traditional payment networks. Major credit card companies have shown strength in digital payments to overcome disruption efforts of big tech companies like Apple
Key names in the technology sector (which represents 42.29% of allocation) include Adobe
For investors seeking well-diversified, long-term capital appreciation through ecologically focused investment strategies, the Strategy Shares EcoLogical Strategy Fund is one name that should be on the radar. Even with its recent moves higher, shares of HECO are still trading below their long-term premium/discount averages. This suggests that the Strategy Shares EcoLogical Strategy Fund is attractively valued at current levels. As core holdings continue to show evidence of consistent earnings strength, HECO finds itself in a strong position to continue producing gains in 2019.