Market seesaws continue to roil sustainable investing, wrote WHEB Partner and Fund Manager Ted Franks in his latest commentary.
One of WHEB’s benchmarks, the MSCI World Index, lost 7.44 percent in British pounds in December. That meant the month was the worst month for the London-based firm ever.
But then the US Dow Jones Industrial Average spiked at the end of the month, delivering its biggest daily gain in its 133-year history, on December 24. That drove up the MSCI World Index before the end of the year.
“Our best ever single day occurred near the end of our worst ever single month,” wrote Franks.
Analyzing the volatility, Franks said Democrats taking control of the United States House of Representatives and instability in the White House helped roil markets. He added that WHEB doesn’t invest based on the political winds, however.
Political changes often bring regulatory changes, however.
Challenges to the Affordable Care Act, which aims to reduce healthcare costs in the US, are problematic but won’t necessarily impact WHEB holdings that foresee growth in sustainable healthcare, Franks wrote. Legal challenges in the American courts that could undermine the Act and a proposed merger between pharmaceutical chain CVS and insurance company Aetna will likely fail on appeal, he added.
His advice: hold on.
“Time will tell whether US political chaos is the defining frame for global investing in 2019,” he wrote. “Legal and regulatory risks are a more permanent part of life. We will continue to use our long-term sustainability frame to navigate them both.”