WEST CONSHOHOCKEN, Pa., May 6, 2019 /PRNewswire/ -- The Forefront Impact Resiliency Strategy (FFIRS), at the beginning of this calendar year, marked three years since strategy inception. The investment solution is designed to provide investors concerned about social impact and Environmental, Social and Governance (ESG) issues with a tool to help navigate turbulent markets. The strategy was introduced three years ago through a collaboration with a large Seattle-based family office seeking to target diversifying allocations to traditional stocks and bonds via exposures to risk factors such as Value, Quality and Momentum.
The Forefront Impact Resiliency Strategy reinforces the belief that impact investors may not need to sacrifice compelling risk-adjusted market returns, and it enables investors to align their portfolios with their desire to generate positive environmental and social change with confidence. By targeting investments with exposures to low fossil fuel consumption, reduced carbon emissions, active corporate engagement, support to communities and small businesses, and zero percent directly in weapons, nuclear energy, tobacco, and gambling along with competitive, diversifying returns, the Resiliency Strategy has pursued the double bottom-line outcomes so dear to impact investors.
More About the Forefront Impact Resiliency Strategy
The strategy currently has approximately $176 million in assets across a number of custodial relationships. According to Nancy Gao, Co-portfolio manager of this strategy, "The Strategy is constructed based on Forefront's proprietary factors and optimization techniques. The underlying investments are also examined according to our impact investment guidelines. Thus, the Strategy attempts simultaneously to capture long-term factor premia, their important dynamics, and make tangible ESG impact. Its dynamic allocation and rebalancing approach target lower correlation to the broad market in the long run. We've seen risk-adjusted performance both in the 20 years back test research sample and in the past three years since inception."
- Impact on a variety of environmental, social, and governance issues, including shareholder activism and social impact. Since inception:1
- 36,974 affordable housing units provided
- 6,230 low-income homeowners helped
- 5-year forest protection campaign established
- 1,420 corporate engagements on issues of social responsibility
- 9,399 small business supported
- 9,997 jobs created or retained.
- Enables ESG-alignment of a portfolio by providing a potential solution for alternative risk exposure in an investor's allocation
- Incorporation of Value, Quality and Momentum themes and their dynamics
- Liquidity of 1940 Act investments
Can be utilized in one of the following ways
- An ESG allocation in the alternatives / hedge fund category enabling "total portfolio impact/ESG activation"
- A stand-alone volatility managed, factor- oriented ESG portfolio
- A broad ESG solution covering a large number of Impact themes at the same time
Forefront and Impact Investing
Forefront Analytics is led by founder Christopher Geczy, Ph.D. In addition to his work at Forefront, Dr. Geczy also serves on the faculty in the Finance Department at The Wharton School and as Academic Director of Wharton's Jacobs Levy Equity Management Center for Quantitative Financial Research and the Wharton Wealth Management Initiative.
"Our early academic research on impact investing concluded that some of the biggest investment challenges faced by mission-oriented investors were limitations on diversification provided by what was available in the marketplace," said Dr. Geczy. "We believe the Impact Resiliency Strategy addresses those challenges and helps impact investors achieve a double bottom line goal of impact and investment diversification."
Dr. Geczy and several of his academic colleagues recently were awarded the 2018 Investment for Impact Award. Their paper "Contracts with Benefits: The implementation of Impact investing" received this prestigious award from the University of California Berkeley Center for Responsible Business.
"We started our project to confront a common skepticism about impact investing being greenwashing—a repackaging of a traditional investment opportunity without substantive changes," said the authors.
About Forefront Analytics, LLC
Forefront Analytics, LLC, West Conshohocken, Pa., an SEC Registered Investment Adviser, is a quantitative investment management firm led by Christopher Geczy, Ph.D., who has research experience in impact/ mission/ ESG investment strategies. One of the firm's key beliefs is that investors may benefit from diversifying their risk beyond traditional stocks and bonds and into "factors" which drive investment performance.
The information provided herein is for information purposes only and does not constitute financial, investment, tax or legal advice and it is not to be considered a recommendation to participate in any particular trading strategy, or deemed to be an offer or sale of any investment product, and it should not be relied as such. All investments are subject to risks. Past performance is not an indicator of future results.
Additional information about Forefront can be found in the Firm's Form ADV disclosure reports, the most recent versions of which can be found on the SEC's Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov.
1 Source: Forefront Analytics, impact reports and prospectuses from invested fund managers
SOURCE Forefront Analytics, LLC