Impact Investing: A Third Factor to the Risk/Return Mindset
Traditionally, risk and return are the two most important considerations in the realm of investment management. Modern Portfolio Theory hypothesizes that investors can construct optimal – or “efficient” – portfolios which maximize expected returns by taking on a quantifiable and specific amount of risk. More than sixty-five years after it was first proposed, it continues to be the gold standard for portfolio construction.
Efficiency, however, is in the eye of the beholder. Today’s investors have become sensitive to a third factor: impact. Simply put, investors are demanding that their investments provide more than just a financial benefit, but a societal one as well. At Fiera Capital Corporation, we strive to put together investment solutions that reflect our clients’ intended risk/return objectives, while staying true to their values.