Ian Forrest, head of IndexIQ, told VettaFi’s editor-in-chief Lara Crigger for “ETF Leaders, Powered by the New York Stock Exchange” that the two things he’s very excited about for the multi-boutique asset manager are its active strategies and thematic lineup.
“Thematic investing is allowing investors access to some of the most interesting, challenging themes impacting our world,” Forrest said at Exchange: An ETF Experience 2022, citing such examples as decarbonization, food security, space, and clean energy. “Investors now have new ways to reach these trends in very unique ways.”
IndexIQ’s Dual Impact franchise is particularly exciting to Forrest.
“These are strategies that allow investors to access great themes like heart disease, well-being, clean energy, and it gives something back to the communities in which they live and surf,” Forrest said. “So, to us, the idea that you’re doing something great with your portfolio and yet giving back to the community is pretty interesting.”
The Value-Based Investor
When it comes to environmental, social, and governance investing, Forrest thinks the investment community is seeing the emergence of “the value-based investor” who makes “portfolio decisions” based on companies and initiatives “that align with their values.”
“It’s taken a while to get to this point, but I think the rise of the value-based investor is driving more conversations for advisors with their clients,” Forrest said, adding that values-based investing is also driving more conversations within the institutional investors as well.
Ultimately, Forrest believes that ESG investing in 2022 has become “more pervasive” and “more mainstream,” which is “being primarily driven by this growth in the value-based investor.”
Building Portfolio Resiliency
In today’s current investment climate, Forrest said that investors should be asking themselves how they can make their portfolios resilient.
“We’ve had a lot of gains over the last couple years, I think people are interested in protecting those gains,” he said.
To do this, investors should diversify their portfolios.
“You want to build a more all-weather type of portfolio that can sustain macroeconomic shocks, monetary policy changes, geopolitical issues, and you want to be able to insulate all of those particular things,” Forrest said. “So, I think this idea of resiliency… is what is top of mind.”
Forrest added that investors have “moved beyond this… risk-on, risk-off type of model” and are increasingly “going for uncorrelated returns,” which means that “alternatives are going to matter more.”
“I just think generally the smartest investors are looking at a more resilient kind of blueprint and asset allocation,” Forrest said.
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