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When more people participate in the economy, societies are better positioned to thrive. Investors can contribute to this positive trend by seeking out companies that are improving access to finance, education, internet, and more. At the same time, these investors have the potential to capture returns associated with both economic growth driven by greater participation and social stability made more likely thanks to upward mobility.
“Inclusive growth can help reduce extreme poverty and share prosperity, and that reduces risks around disempowerment, unrest, and instability,” says Amber Fairbanks, Portfolio Manager with Impax Asset Management and of the new NEI Global Corporate Leaders Fund. “There are huge benefits in terms of positive societal impact … as well as for the end investor in terms of being able to create value over time.”
Impax Asset Management is recognized for its global expertise in understanding powerful long-term socioeconomic trends and corporate culture factors, both of which are potential drivers of strong financial performance. The NEI Global Corporate Leaders Fund is among the first in Canada to showcase this dual focus.
“What we’re looking at is investing in companies really improving the economic standing of people and the economic growth opportunities [associated with that],” says Fairbanks. “That’s going to provide economic tailwinds for those companies positively exposed.”
Her team’s conviction is that long-term secular trends that are shaping society should drive strong performance for companies that are addressing them – but that the market often underestimates growth coming from these trends. One of the best assets a company can have, she adds, is a strong culture that supports motivated and productive employees, lower turnover, better decision-making capabilities, and more diverse influences on decision-making.
Identifying long-term secular trends and analyzing corporate culture indicators allows Fairbanks to capitalize on market inefficiencies, with the goal of achieving long-term outperformance. The team uses a proprietary tool to quantify and score corporate culture by examining factors such as the percentage of women in management, workplace equity and inclusive business practices, and turnover.
Ultimately, by investing in companies that can demonstrate social and governance progress, as well as strong balance sheets, they’re helping to break down barriers to economic participation.
Here’s what investing in socioeconomic trends looks like
One of the biggest obstacles standing in the way of a more inclusive economy is access to financial platforms and financial security.
“There are a tremendous number of people who are either unbanked or underbanked, particularly in emerging markets,” Fairbanks says. “Fintech is doing a great job in terms of making that more accessible [through] affordable and scalable platforms.”
The NEI Global Corporate Leaders Fund holds MercadoLibre, Inc., which operates online marketplaces with a mission “to democratize commerce and financial services to transform the lives of millions of people in Latin America.” The company’s Mercado Libre e-commerce and MercadoPago fintech businesses together have more than 100 million active users in 18 countries.
Founded in 1999, MercadoLibre has grown to become a top five global e-commerce company named among Fortune magazine’s Future 50 in 2023 as one of the world’s highest-growth companies1.
Another significant obstacle is access to education and jobs. This can be facilitated by companies specializing in recruitment, employment, education, and publishing.
Fairbanks points to a company like Recruit Holdings Co., Ltd., headquartered in Japan, which opens doors to job seekers in more than 60 countries through platforms such as Indeed and Glassdoor. Recruit also supports matching platforms and SaaS (software as a service) solutions in Japan and temporary staffing services in Japan, Europe, the United States, and Australia.
This firm is committed to achieving two social impact goals: halving the time it takes to get hired between 2021 and 2030, and helping 30 million job seekers who face barriers such as lack of education, criminal records, disability, and military experiences get hired2.
“Recruit uses data analytics and artificial intelligence to make sure there’s a strong match between the employee and the potential employer. That not only shortens the time for people to get hired, but also ensures a better match so people end up staying in their jobs and there’s lower turnover,” says Fairbanks.
A new path to performance
Society is changing and so are the investment opportunities. Investors can capitalize on this with the expertise of a specialist investment manager and the NEI Global Corporate Leaders Fund.
For more information about NEI Global Corporate Leaders Fund, please visit neiinvestments.com.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus and/or Fund Facts befor investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
NEI Investments is a registered trademark of Northwest & Ethical Investments L.P. (“NEI LP”). Northwest & Ethical Investments Inc. is the general partner of NEI LP and a wholly-owned subsidiary of Aviso Wealth Inc. (“Aviso”).
1 https://investor.mercadolibre.com/about-us/ and https://investor.mercadolibre.com/investor-presentation/
2 https://recruit-holdings.com/en/ and https://recruit-holdings.com/en/sustainability/social-impact/
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