Mutual Funds are an investment option that can be relied upon by anyone, including HNWIs (High Net Worth Individuals) who have significant net worth.
Of course, the decisions and choices of HNWIs in investing must be precise and through careful consideration. Many HNWIs choose to focus on sustainable investing and adopt ESG as their main strategy.
Sustainable Investing
Let us first understand what the concept of sustainable investing really is. Many people think that this is an investment strategy that focuses only on the environment, but in fact, it is more than that.
Sustainable investing is an investment activity that focuses on three dimensions called ESG. ESG stands for Environmental, Social, and Governance. When investing, investors not only need to focus on issuers and the potential profits to be gained. Beyond that, investors must also pay attention to these three elements.
Of course, the ESG criteria themselves must be understood by investors so that they can choose the right type of asset to invest in without violating these principles. ESG applies three dimensions, and all three must be balanced and consistent.
At present, many HNWIs, or investors with significant net worth and assets, make ESG their main strategy. Their focus is on sustainable investing, not only to preserve asset value but also to generate profit.
Why Has ESG Become the Main Strategy for HNWIs?
ESG is used as the main strategy for HNWIs not without reason. Of course, there are many benefits that make them choose sustainable investing and pay attention to ESG strategy.
Here are some reasons why ESG has become the main strategy for HNWIs:
● Awareness and Alignment with Personal Values
The first reason is certainly awareness and alignment with personal values. In investing, this is very important to consider.
HNWIs will choose ESG as an investment strategy because it aligns with their personal values. Currently, more and more HNWIs want to align their investment steps with values of social and environmental concern.
Of course, this is different for each individual. So, it cannot be generalized for all HNWIs because the values they hold and the principles they believe in are not the same.
● Long-Term Potential
The next reason is the long-term potential that can benefit investors or HNWIs. This is closely related to the prospects of ESG itself.
Investments based on ESG have shown strong performance and are suitable as a long-term basis. Especially now, ESG development is quite significant.
Environmental and social issues continue to grow stronger. This is what drives ESG-based investments to be more robust and even more resistant to market volatility.
● Reputation Enhancement
You can see for yourself the current situation where companies with an ESG basis have a better image in the eyes of the public. This is because social and environmental issues are being strongly promoted and carry a positive image.
Of course, this is very beneficial because it fosters public trust and can provide stronger performance potential in the future. Not only beneficial for companies but also for the investors involved.
HNWIs generally invest for the long term. This drives them to use strategies with a strong foundation, including ESG. However, it should be further analyzed whether the company truly implements ESG or not. Do not be deceived by false branding.
● More Effective Risk Management
ESG has become the main strategy for HNWIs partly because risk management can be more effective. Of course, in preparing an investment strategy, risk management must be well considered.
Considering the three ESG factors can help identify and reduce risks in a company. For example, poor regulations or environmental impacts.
ESG can be used as a reference to see how future movements will unfold. A company’s reputation can also be analyzed well to minimize existing investment risks.
However, of course, this requires thorough analysis. It is very important to pay attention to several factors involved so that risk management becomes more effective and profitable.
● Creating Positive Impact
Investments based on ESG not only benefit certain parties but can also provide positive benefits and advantages for the environment and society at large.
This happens because companies involved prioritize sustainability principles and pay attention to environmental and social factors. These sustainable principles will provide benefits for both society and the environment.
Of course, this is very important to consider, given that future generations will use the environment we live in today. Sustainability principles will preserve those conditions and provide a well-maintained social environment.
● Wider Investment Opportunities
If you want to continue developing investments and adding assets, ESG will be the right strategy. Companies based on ESG have wide-open investment opportunities and great access to capital.
This will certainly benefit investors, especially if it is continued as a long-term strategy.
However, it is indeed very important to analyze ESG-principled companies carefully. Make sure that the ESG principles being implemented are truly correct and effective.
If chosen appropriately, the ESG strategy applied in this investment step will surely yield positive results. In addition, the profits obtained will certainly be more optimal.
Implement ESG Strategy in Mutual Fund Investments with DBS Treasures
ESG can be the right investment strategy for HNWIs. Of course, in this case, you need to choose the right partner to make your investments more profitable. You can make DBS Treasures priority banking your trusted investment partner.
Through DBS Treasures priority banking, you can invest securely, with your funds directly managed by experienced Investment Managers.
You will also enjoy various conveniences to gain insights that will guide your investment steps more effectively. Not only that, diversification will also be easier to carry out so that your investment risks can be minimized.
Moreover, the DBS digibank Application is available to simplify Mutual Fund investments. Through this app, you can register for a Single Investor Identification (SID) and conduct buy, sell, and switch transactions quickly.
You will also be supported by curated market analysis from financial experts who communicate it and provide you with the latest opportunities tailored to your risk profile and portfolio needs, driven by Artificial Intelligence/Machine Learning (AI-ML). These insights are complemented by curated solutions in investment (Grow) and insurance (Protect), so you can invest swiftly and confidently through your preferred channels.
Prepare a well-planned long-term financial future now through Mutual Fund investments with DBS Treasures priority banking as your trusted partner. More complete information is available here.
