We constantly learn more about investing, build disciplined strategies to capture the best of what we've learned, and share our broad findings with other curious investors.
In 2019, we completed more research than in any prior year, built and launched Canvas, and shared 13 papers and over 50 podcasts. This letter is intened to share where markets stand at year end, and discuss what we built and learned at OSAM during 2019.
In order to scale, the largest ESG products are designed to be one size fits all. This approach waters down and often tilts away from the values investors (institutional or individual) want. Poorly defined ESG screens and tilts can lead to starting universes and portfolio holdings that are not aligned with investors’ goals. We believe the best solutions are reached by tailoring portfolios to the unique goals of each investor. This paper discusses best practices in: tailoring ESG screens and tilts, combining ESG with Alpha factors to improve return expectations, and using differences in ESG data providers to solve a wider range of ESG goals.
Today, I am excited to announce the release of Canvas, the first investing software that allows advisers and allocators to design, implement, and maintain deeply customized investment strategies. Building on OSAM’s 2+ decades of expertise in factor and systematic strategy design, Canvas hands allocators the keys to our best systems so they can design tailored strategies for their clients. Give your clients something they cannot find elsewhere—a strategy built uniquely for them.