ESG Focus | Jun 27 2019
FNArena's dedicated ESG Focus news section zooms in on matters Environmental, Social & Governance (ESG) that are increasingly guiding investors preferences and decisions globally. For more news updates, past and future:
Morphic Explains Shorts For CCL, Woolies
By Rudi Filapek-Vandyck
It's a burgeoning industry, still, albeit incredibly fast growing and with increasing impact. Already there is a plethora in approaches, strategies and styles available for investors who like to see their money invested in non-traditional manner.
One of the better known domestic managers using responsible investment filters before selecting and researching stocks is Morphic Asset Management, soon to be acquired by Ellerston Capital. Morphic also provided the rough overview in styles below.
What makes Morphic unique in its style of responsible investing is that it can not own any companies that fail at the first hurdle of stringent ESG filters applied, but it can go short such companies. The fund managers explained during the recent investor tour their reasons for being short Woolworths ((WOW)) and Coca-Cola Amatil ((CCL)).
When funds managers like Morphic go short on a stock they are trying to benefit from a weaker share price at some point into the future.
While taking a short position on an ASX-listed stocks is not at every investor's disposal (I have never gone short on any stock myself), I suspect either or both stocks might be included in many portfolios, which is why investors may want to take notice.