John Love, president and CEO of USCF, is “very concerned about inflation.” In fact, he’s “been concerned about it since I heard the term quantitative easing in 2008.”
Speaking with NYSE’s Judy Shaw for “ETF Leaders Powered by the NYSE,” Love explained that he believes that back in 2008, “the Fed engineered things correctly and we exported a lot of inflation to China,” which led to “good growth for a decade.” But now, inflation is the highest it’s been in 40 years and is “one of the critical things that investors are going to be having to navigate this year and probably for a few years ahead.”
“It’s something to manage now, not just something to worry about,” Love added during the interview, which was conducted at Exchange: An ETF Experience 2022.
Managing Risk in 2022
As a self-identified “commodities guy,” Love believes that investors should get exposure to commodities, “especially broad commodities” to manage their risk. But that’s not all — investors will “want to maintain good diversification” and stick to their long-term strategy, regardless of what shape the market is in.
“We’ve got a lot of uncertainty in the world today, more than I think we’ve had … since the financial crisis,” the USCF CEO said. “So, I think sticking with a good long-term strategy, being diversified, and probably looking for exposure in a few places you may not have traditionally looked” are key “to keep that portfolio strong for the long term.”
Looking Under the Hood With ESG
Love also discussed the importance of environmental, social, and governance investing, and pointed out the two main reasons investors seek it. For one thing, investors “actually want to have an impact” and “want the companies [they’re] investing in to drive that.” The other reason is that they want returns. However, “those two don’t necessarily go hand-in-hand.” So, investors really need to look under the hood and see what they’re getting.
“Is the ESG rating rally meaningful for this company? Are its fundamentals strong as well? What does it mean?” Love asked. “A lot of companies can make a net-zero pledge for 2030, 2040, but they could be one of the worst polluters on the planet.”
So, Love thinks “it’s really critical” for investors to ask themselves: “What does ESG mean to you, what does it mean in the investment you’re making, and what else is out there that you might want to take a look at that might give you … exposure to something that really is driving change toward the future.”
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