Visitez Perrier Fri, 08 Oct 2021 07:06:34 +0000 en-US hourly 1 Visitez Perrier 32 32 What is a balanced investment portfolio? Thu, 07 Oct 2021 19:40:52 +0000

Is your investment portfolio balanced accordingly? A balanced investment portfolio is a collection of investments held by an individual or entity. Investors manage all investments collectively within the portfolio to achieve specific goals and objectives. to be really balance, a portfolio allocates assets to hedge risk based on the holder’s tolerance.

Balanced investment portfolios are strategic in how they offset risk. At a high level, this could mean balancing the representation of stocks versus bonds. Diving deeper, that could mean offsetting growth stocks with blue chip dividend payers. Diversifying the portfolio creates a balance, which in turn mitigates risk.

Here’s what it means to have a balanced investment portfolio and how to look at your own investments with a risk management mindset.

Balance comes from the sum of all the parts

There are many ways to balance a portfolio. A traditional “balanced portfolio” tends to include 60% equities and 40% bonds. However, since balanced portfolios seek to balance risk and return, they are subject to factors such as an individual’s risk tolerance or time horizon. Common examples can include:

  • 90% equities, 10% bonds for young investors with high tolerance for risk
  • 80% stocks, 20% bonds for middle-aged investors saving for retirement
  • 70% stocks, 30% bonds for those nearing retirement in 3 to 5 years
  • 40% stocks, 60% bonds for those who are well retired, looking for passive income

Each example represents the balance, based on the investor. They offset risk and reward accordingly, to ensure stable portfolio performance. Investors with balanced portfolios enjoy the peace of mind that comes with relatively predictable behavior, no matter where they are in their investment timeline.

How to Create a Balanced Investment Portfolio

Regardless of the ratio of fixed income to equity securities, the true balance of the portfolio comes from the composition of those assets. For example, a 90% equity profile might have half of those growing stocks and the other half in blue chip companies. Likewise, a 60% bond portfolio may contain riskier bonds with higher coupon rates. It all depends on the investor.

Identify investment objectives

Without an investment objective, you have nothing to assess the performance of your portfolio. Do you want to invest for your retirement? Grow your discretionary wealth? Investing for your child’s future expenses in college? Your objective investment will ultimately define your risk tolerance and time horizon, which together determine the balance of your portfolio.

Assess risk tolerance

Risk tolerance is your ability to maintain your holdings without locking in losses. How much are you prepared to lose before leaving your positions? Balance comes by watching how happy you are to earn. If you are willing to keep 50% of returns, you must be able to keep 50% of losses. The more time you have ahead of you, the more likely your risk appetite is.

Evaluate the time horizon

The time horizon is the length of your accumulation phase or the time you spend holding an investment. The longer, the more aggressively your portfolio can be balanced. If you are nearing retirement, it is safer to allocate a more traditional balance to your portfolio.

Select asset classes

Different asset classes carry different levels of risk. Small-cap growth stocks, for example, are much riskier than the AAA-rated corporate bonds of a blue-chip company. ETFs give you the opportunity to diversify until you feel comfortable. Real estate is illiquid, but historically appreciates well. Match your investment outlook to the assets that make sense in a balanced portfolio.

Balance, then rebalance

Balance comes from considering all of the above factors in the context of an investment portfolio. Keep in mind that as the assets in the portfolio appreciate at different rates, they will need to be rebalanced. Investors can rebalance every year or at pivotal times in their lives when their investment philosophy or risk tolerance changes.

Most financial planners and investment advisers will follow exactly this route to a balanced portfolio for clients. Often, they will also deepen their research to identify the right assets to ensure accumulation of wealth based on the investor’s goals.

A look at risk by asset class

While most traditional portfolios divide a ratio of stocks and bonds, any investment vehicle can be part of a balanced portfolio. Here is a preview asset classes, weighted by risk (from highest to lowest):

  • Actions (for example, actions)
  • Index funds and ETFs
  • Merchandise
  • Currencies
  • Cash and cash equivalents
  • Immovable
  • Fixed income (for example, bonds)

Building a balanced portfolio begins with identifying assets that match your risk tolerance and investor mindset. Then it comes down to fine-tuning the ratio of those holdings to the total portfolio and balancing the assets themselves.

Consider investing in balanced funds

If building a balanced portfolio seems like a lot of work, you can choose to invest in a balanced fund. Mutual funds and some ETFs are aimed specifically at investors who want mitigated risk in a portfolio focused on unique criteria. There are mutual funds for everyone, from the aspiring investor in their twenties to the risk averse senior approaching retirement. Just be sure to keep an eye out for management fees!

Balance is in the eye of the beholder

Balance means something different for everyone. If you’re a new investor in your 20s with an appetite for risk, your 90% equity portfolio might include a few market pillars as a hedge against growth stock volatility. If you’re 70 and ready to retire, the balance tends to lean heavily towards fixed income investments and avoid stocks.

To find out how to balance your portfolio, subscribe to Freedom through wealth e-letter below. You can discover different ways to enrich your portfolio and protect your investments!

Organizing your portfolio to achieve the right risk-return balance is something unique for every investor. Consider the most important factors at play, understand asset classes, and continue to pay attention to how your portfolio grows and changes based on your outlook.

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Namibia: New investment vehicle to protect minors Mon, 04 Oct 2021 14:08:24 +0000

The Namibia Miners Union (MUN) last week launched NAMITVest Investment Holdings, which aims to create a buffer to mitigate the impact of job losses due to any unforeseen economic shock in the mining sector.

According to Jason Kasuto of NAMITVest, the launch is a large, large-scale empowerment initiative that aims to build members’ investment portfolio and build generational wealth for members and their dependents.

In July 1997, MUN established a trading arm, known as Namibia Mineworkers Investment Holding Company (NAM-MIC), which since its inception has increased its net asset value to N $ 500 million, with interests in key sectors such as mining, finance services, including banking, transport and logistics, health and tourism.

The objective of MUN has been to ensure that the beneficiaries, consisting of its members, ex-members and their dependents, are raised through the activities of the commercial branch.

“After having prudently developed the portfolio of NAM-MIC to an important level, the MUN Trust, being the 100% shareholder of NAM-MIC, will now dilute 25% of its stake in NAM-MIC, valued at 103 million of Namibian dollars to reach a database target of 37,000 members, ex-members and their dependents through a special-purpose vehicle called NAMITVest. These beneficiaries will be able to subscribe for units at a discount rate of 50%, ”Kasuto explained.

On the same occasion, Deputy Minister of Mines Kornelia Shilunga said she was delighted to learn that among the sectors targeted by NAMITVest for investment are green industries that have a positive impact on climate change.

She further urged NAMITVest to consider investing in renewables such as solar wind.

“NAMITVest has implemented a loyalty and rewards program that will integrate various service providers such as retailers across Namibia, where members will be able to receive discounts on their purchases, creating a direct benefit for members today. in a way that will uplift their daily lives, ”explained Shilunga.

The Deputy Minister also encouraged NAMITVest to invest in data management, as this will determine the company’s ability to reach its members effectively and efficiently.

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Reduce the impact of income tax on investment bonds Wed, 29 Sep 2021 13:00:43 +0000
Shaun Moore; Copyright Dave Phillips

UK resident customers who have or can earn on investment bonds may face an income tax charge. Basic planning with pensions can reduce the impact.

Single premium investment bonds are imposed under taxable events legislation, meaning that taxable gains are assessed against income tax rather than capital gains tax (CGT). This can result in taxation of earnings at rates of up to 45%, losing almost half of the “profit”. UK-based or onshore investment bonds offer the bondholder a tax credit of 20% of the gain offsetting corporation tax incurred as part of the insurance envelope. This results in a personal income tax subject to higher and additional rates only.

Understanding the reliefs

There are many reliefs available for billable event gains, but we will focus on the top bracket relief which divides any gain by the full years carried forward to provide an overall or annualized gain figure. This overall gain is used to calculate the tax on the total gain as if your client had acquired it each year in order to avoid paying higher income tax rates than they normally would.

Although source relief from pension contributions enjoys immediate 20% tax relief under a UK registered pension scheme, higher and additional rate relief is provided by extending the income tax brackets. It works by extending the base rate and the top rate bracket by an amount equivalent to the gross pension contribution (after deduction of 20% at source). For example, if £ 8,000 were put into a source relief scheme, £ 10,000 would be credited to the scheme and the base rate range would drop from £ 37,700 to £ 47,700. This allows more income to be taxed at 20%, thus providing an additional 20% relief to higher rate taxpayers. The same concept exists for the upper rate bracket.

Using the concepts of higher relief and income tax bracket extension, simple planning strategies can help your client avoid paying a higher tax rate on a taxable event gain. Your client must be eligible for source relief from pension contributions (and have sufficient annual allowance) and have sufficient funds to do so. The proceeds from the removal of the bond could of course provide some or all of the money.

The examples below use the 2021/22 allocations and bands. The first shows an onshore bond gain and a simple way to avoid paying additional tax on the gain. And the second shows how a net tax bill of £ 0 on a bond gain can be achieved for a higher rate taxpayer.

Example 1

Income: £ 45,000

Bond gain: £ 35,000 over 5 years (tax treated as paid £ 7,000)

Without planning, this gain would result in income tax after top bracket relief of £ 1,230, as the total gain of £ 7,000 (£ 35,000 / 5) exceeds the base rate range.

By making a source relief from the pension contribution of £ 1,000 (£ 1,250 gross) this tax could be avoided while adding £ 1,000 to the pension provision.

It works by extending the baseband from £ 1,250 to £ 38,950. This is enough to keep the overall payout of £ 7,000 within the base price bracket:

Allocations and brackets available

£ 12,570 personal allowance + £ 38,950 base rate bracket + £ 500 personal savings allowance =

£ 52,020 before higher rate payable on bond gain

Total taxable income, including overall gain

£ 45,000 of income + £ 7,000 of overall gain = £ 52,000

By recommending source relief from pension contributions that is lower than the original tax bill, your clients could avoid paying any tax on the taxable event gain realized on a UK investment bond.

Example 2

Income: £ 60,000

Bond gain: £ 20,000 over 5 years (tax treated as paid £ 4,000)

Without planning, this gain would result in income tax after relief of £ 3,000, as the total gain of £ 4,000 (£ 20,000 / 5) is above the base rate range. The personal savings allowance is available in this example but is not sufficient to cover the entire gain.

By providing relief at source of pension contributions of £ 6,000, immediate tax relief is applied to the scheme providing a gross contribution of £ 7,500, providing a tax refund of £ 1,500 into the pension scheme. In addition, the base rate bracket is widened by the gross contribution of £ 7,500, which provides an additional income of £ 7,500 subject to 20% instead of 40% providing a tax saving of £ 1,500.

By recommending relatively modest source relief from pension contributions, your clients could get a net tax position of £ 0 on a taxable event gain realized on a UK investment bond.

Paying tax on an investment is a sign that you have managed your clients’ money well. Sometimes the tax bill is inevitable, but you can add value by offering a full exit investment strategy by combining it with contributions to retirement provision. This can avoid the tax or “soften the blow” by recovering it either directly (reduction of tax on other income) or indirectly (applied to a pension scheme).

Shaun Moore is a Tax and Financial Planning Expert at Quilter

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EMURGO Launches $ 100 Million Investment Vehicle to Drive Innovation at Cardano Wed, 29 Sep 2021 12:22:19 +0000

EMURGO, the commercial arm of the Cardano network, has announced that it will allocate $ 100 million to a new investment vehicle for startups.

This new investment vehicle in the Cardano ecosystem will be accessible to startups and early stage companies that develop solutions on the Cardano network and have the potential for social impact. To this end, the organization has created EMURGO Africa and EMURGO Ventures, each with their own investment thesis. Charles Hoskinson, creator of Cardano and CEO of IOHK, said of the initiative:

“EMURGO’s investments will help shape the future of the Cardano ecosystem, a mature network with a creative and diverse community, developing smart contract capabilities and partnerships across the globe that provide social and financial services. using Cardano’s proven security technology. “

EMURGO Africa will focus on supporting regional startups in need of seed funding and incubation support as well as being located in Africa and will seek to boost the adoption of Cardano as a new technology standard.

EMURGO Ventures, on the other hand, will focus on developed markets by allocating capital for seed investments on startup construction projects related to DeFi, NFT, Blockchain Education and decentralized applications. Ken Kodama, CEO of EMURGO, referred to efforts to expand the Cardano ecosystem saying:

“We are focusing more than ever on accelerating the development of the Cardano ecosystem with a rich mix of decentralized services aimed at a global community that is increasingly aware of the blockchain. EMURGO is committed to meeting this demand by providing the capital and strategic resources necessary for the companies in our portfolio to scale rapidly and bring new solutions to Cardano ”,

With the recent rollout of the Alonzo upgrade, Cardano has seen growing interest from developers looking to take advantage of its new smart contract capabilities. This new EMURGO initiative is certain to stimulate innovation in the network by allowing entrepreneurs to launch their startups and collaborate in the development of the network.

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EMURGO Launches $ 100 Million Investment Vehicle for Early Stage and Growing Startups in Africa Wed, 29 Sep 2021 10:38:37 +0000

EMURGO has announced the launch of a new investment vehicle in the Cardano ecosystem to invest in early stage and growth stage startups.

The official business arm of the Cardano blockchain will invest in startups focused on creating social impact solutions powered by Cardano.

As 100% subsidiaries of the parent company EMURGO Ptd. Ltd., this new Cardano investment vehicle will consist of two separate entities, EMURGO Africa and EMURGO Ventures, each with a separate investment thesis.

EMURGO Africa aims to support more than three hundred regional startups through seed funding and incubation, ultimately to get Cardano blockchain adopted as the standard technology platform in Africa for solutions with social impact. EMURGO Ventures will focus on other developed markets to facilitate the creation of solutions and services on Cardano with a fixed capital allocation for seed investments in a variety of startups and middleware solutions companies focused on Cardano, including those that create decentralized financial services (DeFi), non-fungible token (NFT) projects, blockchain developer training tools and other decentralized applications.

The integration of smart contracts into Cardano’s blockchain should now foster broad innovation in decentralized services and EMURGO’s new investment vehicle through these two entities will support this initiative. As subsidiary entities of EMURGO – one of the founding members of Cardano – EMURGO Africa and EMURGO Ventures will leverage EMURGO’s deep experience in the deployment of blockchain solutions and the global network of industrial partners to provide capital to its portfolio companies, thereby helping to strengthen the Cardano ecosystem.

Through its previous partnership with SOSV, EMURGO has made more than ten direct investments in blockchain startups, including API3 – a data service provider for blockchains that has raised major fund investments in the blockchain industry. For its initial launch, EMURGO Africa announced two major partnerships to rapidly expand the Cardano ecosystem by Africa and use the major commercial networks of its partners.

Adanian Labs, an operator of start-up studios in Africa, will partner with EMURGO Africa to support impact-driven startups that are expanding the Cardano ecosystem across the continent. Adaverse, a joint Cardano-focused accelerator program in Africa along with industry-leading blockchain accelerator Everest Ventures, will also partner with EMURGO Africa. For its initial launch, EMURGO Ventures announced its first seed investment in Milkomeda – a dcSpark side chain project connecting Cardano and other Layer 1 blockchain protocols that will use Wrapped ADA (wADA) as an asset.

“We are focusing more than ever on accelerating the development of the Cardano ecosystem with a rich mix of decentralized services aimed at a global community that is increasingly aware of the blockchain. EMURGO is committed to meeting this demand by providing the capital and strategic resources necessary for our portfolio companies to scale rapidly and bring new solutions to Cardano. said Ken Kodama, CEO of EMURGO.

Charles Hoskinson, CEO of IOHK, said: “EMURGO’s investments will help shape the future of the Cardano ecosystem, a maturing network with a creative and diverse community, developing smart contract capabilities and partnerships through the world who provide social and financial services using Cardano’s secure technology. . “

According to the Chainalysis 2021 Global Cryptocurrency Adoption Index, global cryptocurrency adoption has jumped over 880% and is skyrocketing, driven by the use of DeFi platforms in the markets emerging. It is worth noting that residents of these markets have increasingly used DeFi platforms as the primary gateway to access cryptocurrencies due to a lack of access to centralized exchanges and traditional financial services.

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Choosing investment stocks: the best strategies and approaches Tue, 28 Sep 2021 15:09:35 +0000

Many people with reasonable disposable income consider investing in the stock market, and for most, the first stumbling block is knowing which stock to choose. There are so many different possibilities that a lot of people give up at this point. After all, making the right choice at this point decides whether you’re going to win or lose money. With no one to guide you, the possibility of making the wrong choice is too scary, so many people give up and leave their money in the bank where at least it will be safe, if not accumulating far more than a negligible amount of interest.

Of course, no one can guarantee which actions will make money and which will fail. If they could, we would all be millionaires. But it’s possible to make an informed decision and, perhaps more importantly, choose the action that’s right for you. Remember that as an investor you will be for the long haul so you need to determine what your goals are and whether you will be able to track and understand the progress of your stock over the many years to come. .

Determine your goals

Ask yourself why you are investing. Are you hoping to cash out relatively quickly, hopefully with a decent profit, or is this a long-term investment that will mature in a few decades? Do you want to generate a regular and regular income, through dividends and distributions, or do you want to accumulate capital and leave it untouched until the need arises?

If you want regular income, look for stocks with good dividend yields, such as eToro dividends, but make sure the business has the cash flow and earnings to support those dividends. Strong, established but low growth companies in industries like utilities will generally pay regular and reliable dividends. Your stocks won’t massively increase in value over the course of your lifetime, but neither are they likely to become worthless overnight.

Different options

Low risk businesses are also best for long term wealth accumulation. Go for blue chip companies and consumer staples that will be in demand even during an economic downturn. Avoid luxury goods and overly publicized innovations. On the other hand, if you want to significantly increase your capital, you might want to take a risk on a young company with the potential for growth.

In addition to being spread over several sectors, a diversified and healthy portfolio can contain stocks of all these categories. While it is not advisable to put all your eggs in one basket, the exact balance of investments should depend on your overall intentions and requirements.

Go with what you know

Now that you know why you are buying stocks, the next step is to decide which industry sector you want to invest in. Here the answer is to go with what you know. If you don’t really understand what a business is doing, how will you know if it’s doing right or wrong? Look for industries that really interest you, or that manufacture items or provide services that impact your daily life. You will be spending a lot of time researching this area, and if it seems boring or out of place, then a lot of important details will go through your mind.

At the same time, you also need to consider the long term prospects of the industry in question. Is it likely to be threatened by technological advances, changes in social attitudes or new laws relating to health and safety, pollution control, etc.? No one knows what tomorrow may bring, but making your investments as sustainable as possible is always a good idea.

Best in the field

Now that you’ve narrowed down your selection to a particular industry, it’s time to pick the best company in that area. Here, nothing replaces serious research. Explore company reports and press releases, financial news, expert opinions, historical stock prices and historical market performance. Find articles and reviews on stock analysis. You want to find a business that has a strong competitive advantage, but where the stock is not too expensive and still has the potential for growth.

Look at a company’s P / E ratio. This represents the price / earnings ratio and is a way to determine if the stock price is fair. A low P / E ratio is preferable to a high ratio. Take a look at the company’s balance sheet and steer clear of heavily indebted companies, even if they seem to be doing well.

As mentioned earlier, a healthy portfolio should be diversified across multiple industries, so you should repeat this process multiple times. Decide what you want your portfolio to achieve, then choose contrasting areas that interest you. Explore the trends that drive them and identify leading companies in the industry before examining their underlying value. Soon you should have a portfolio of stocks that you can be proud of.

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IPO Watch: Touch Ventures post-payment-backed investment vehicle is expected to be listed on ASX on Wednesday Mon, 27 Sep 2021 05:24:42 +0000

Afterpay-backed investment fund Touch companies (ASX: TVL) is expected to join ASX on Wednesday.

Touch Ventures raised $ 100 million at 40 cents a share and is expected to be capitalized at $ 285.3 million when it debuts in ASX.

It was officially launched at the end of 2019 and was 44% owned by Post-payment (ASX: APT) although it also has other shareholders, including Alex Waislitz and Duncan Saville.

Afterpay will own 24.3% after the deal is closed, and the two companies have a formal collaboration agreement whereby Afterpay could refer potential investment opportunities to Touch Ventures.

TVL has made five investments prior to the publication of its prospectus, totaling $ 75.4 million to date and hopes to expand the portfolio over time. These included:

  • Happiness – a BNPL company focused on China
  • Send – a messaging platform
  • Basiq – a financial data platform
  • Play travel – an online travel reservation and payment platform and;
  • Post-payment – a BNPL company focused on the United Arab Emirates

And today, just two days before listing, Touch Ventures announced it has made another investment in Refundid, a platform that offers instant cash returns to buyers who return their goods.

He paid $ 1 million for a 10.4% stake and also provided a $ 1 million term loan facility.

Touch Ventures chairman Mike Jefferies and CEO Hein Vogel both said the listing was a milestone for the companies and promised the portfolio would grow over time.

“While this is an important milestone, Touch Ventures’ journey has only just begun and we look forward to working with leading entrepreneurs in Australia and internationally who are building the next generation of businesses. that will boost local and global economies, ”said Vogel.

The listing of Touch Ventures comes two months later Post-payment (ASX: APT) unveiled a $ 29 billion merger and acquisition deal with payments giant Square.

The Afterpay service will be integrated into Square although the company will remain listed on the ASX.

Comparable companies

While there is no shortage of ETFs and LICs that invest in mid to large cap tech companies, there is only a handful of other ASX companies that are investment vehicles. for start-ups.

But one of the few others is Bailador (ASX: BTI) which has a portfolio of over $ 200 million.

It had a successful FY21 with a near doubling of its share price, a profit of $ 27.6 million, a $ 52 million increase in its investments as well as three full cash investments and a merger.

Another company was Sky Blue (ASX: BLA) but it was placed in receivership and its assets were recovered by one of Wilson Asset Management’s LICs – Alternative assets WAM (ASX: WAM).

While WAM retains some of Blue Sky’s private equity investments, it also owns stakes in real estate, infrastructure and agriculture.

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Investment vehicle to advance 772,000 m² of logistics space Mon, 20 Sep 2021 09:11:15 +0000


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Hines, the international real estate company, together with its joint venture investment partner, has committed to term finance the speculative development of 772,000 square feet of logistics facilities in four business parks in the East Midlands, owned by the developer of the Derbyshire, Clowes Developments.

The JV has acquired full ownership of all sites from current owner Clowes Developments, who will develop all facilities. Construction will begin with immediate effect with units ready for occupancy by the end of 2022.

The 12 units are spread over four existing industrial and logistics sites in the Clowes portfolio; Dove Valley Park off the A50 at Foston in Derby, Birchwood Business Park in Alfreton, Castlewood in South Normanton and Fairham Business Park in Nottingham.

Greg Cooper, Managing Director and Head of Industry and Logistics at Hines UK said: “This was a particularly attractive opportunity given the scarcity of new inventory entering the market, which continues to see demand from tenants without precedent as the volume of transactions continues to skyrocket, especially for modern and adapted units. We are delighted to be working with Clowes who have unmatched experience in providing first class industrial and logistics facilities.

James Richards, Director of Clowes Developments, said: “This agreement marks another important transaction in what is expected to be a banner year for the group. We are delighted to be working with Hines to provide a must-have inventory of quality logistics facilities in the East Midlands.

“We have said this before and will continue to recognize that the success of an agreement depends on teamwork. Our internal teams at Clowes and our reliable external team, including legal representatives Heather Dixon and Chris Hawrylak at Geldards, David Postins, our employer’s agent and architect, Ben Hall at IMA Architects, were instrumental in concluding the contract. This agreement.

Kimmre advised Hines on the transaction.

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Commerzbank targets ‘net zero’ credit and investment portfolio by 2050 By Reuters Fri, 17 Sep 2021 07:00:00 +0000

© Reuters. FILE PHOTO: A company logo is pictured at the headquarters of Commerzbank AG Germany in Frankfurt, Germany February 13, 2020. REUTERS / Ralph Orlowski / File Photo

FRANKFURT (Reuters) – Commerzbank (DE 🙂 on Friday said its portfolio of credits and investments would be “net zero” for carbon emissions by 2050.

It also announced that it would triple its sustainable fundraising activity to around 300 million euros by the end of 2025 compared to the end of last year.

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NYSE’s New Investment Vehicle “Natural Asset Companies” To Harness ESG Fever Tue, 14 Sep 2021 07:00:00 +0000

America’s most iconic stock exchange wants to bridge the gap between nature and the concrete jungle that is Wall Street.

As investors closely scrutinize companies’ environmental, social and governance or ESG credentials, the New York Stock Exchange on Tuesday unveiled a two-year partnership in the works with Intrinsic Exchange Group to open up investment opportunities in what IEG calls “the economy of nature”. “

“There have historically been no mechanisms to encourage the capital formation necessary to preserve and restore the natural assets that ultimately underpin the capacity for life on Earth,” said Michael Blaugrund, COO of NYSE. Fortune.

So the Big Board helps create one.

The NYSE has developed a new type of quotation vehicle that will be called a Natural Assets Company, or NAC. Using NACs, governments, farmers and other owners of natural assets will be able to form a specialized company that owns the rights to ecosystem services produced on a given piece of land, services such as carbon sequestration or clean water. . Then the company will operate the US public markets through the NYSE like any other entity would. The difference is that instead of using the raised capital to consolidate a balance sheet, fund mergers and acquisitions, or buy back shares later, NACs will use the funds to help preserve a rainforest or undertake other conservation efforts. , like changing the conventional methods of a farm. agricultural production practices with regenerative methods.

In return, investors will have access to a new form of sustainable investing – a space that has captivated BlackRock CEO Larry Fink over the past few years, although there are big unanswered questions about it. A 2020 report from the US SIF Foundation, a nonprofit organization that advocates for the adoption of sustainable investing, found that one in three dollars under professional management in the United States at the end of 2019 was managed with a sustainable investment strategy.

“Our hope is that owning a natural asset company will allow a growing range of investors to invest in something that has intrinsic value, but which, until now, was really excluded from the financial markets. Blaugrund said.

When public, an NAC will be required to file financial statements in accordance with US accounting rules, like any other publicly traded company. However, IEG, whose investors include the Inter-American Development Bank, the Rockefeller Foundation, and Aberdare Ventures, has also developed a framework to measure the ecological performance of a NAC to fill in the gaps in traditional measurements. Ecological standards will include “relevant, reliable and understandable information on the flows of ecosystem services [the NACs] produce and their stocks of natural capital assets, ”former Financial Accounting Standards Board chairman Robert Herz said in a statement on Tuesday. Herz and several accounting firms have helped advise IEG on the development of the ecological framework.

The NYSE also took a minority stake in IEG, according to Tuesday’s statement. The companies did not disclose the terms of the investment, however. The NYSE said the investment was not material to the earnings or capital allocation plans of its parent company, Intercontinental Exchange.

The exchange plans to file listing standards and accounting information for NACs with the United States Securities and Exchange Commission in the fourth quarter, paving the way for vehicle availability, if approved by the SEC. , starting next year.

IEG has already succeeded in attracting the interest of issuers from several parts of the natural asset market. He plans to announce a collaboration with a “multinational corporation” to form a NAC later this year, the statement said. And IEG, in partnership with the Inter-American Development Bank, is currently in talks with the Costa Rican government on forming a NAC. “This will deepen the economic analysis aimed at giving nature its economic value, as well as continuing to mobilize financial flows for conservation,” said Costa Rica’s Minister of Environment and Energy, Andrea Meza. Murillo, in a statement.

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