Advisors interest in socially responsible investing rose dramatically since 2016, according to new research by Eaton Vance.
Forty percent of advisors now report that socially responsible investing is important to them and their clients, compared to only 21 percent who said that in 2016.
“A fair amount of that increase is due to the change in the administration in Washington,” says John Moninger, managing director of retail for Eaton Vance. President Trump is pushing for business friendly policies over environmental and social issues. “People feel if the administration is not going to promote environmental and social causes, they will do it themselves.
“But we were already seeing an increase in responsible investing before the Trump administration came in, and people have found that companies that have good governance practices perform well,” he adds.
The increase in interest in all types of environmental, social and governance investing, which Eaton Vance dubs responsible investing, will continue into the future, Moninger says.
The sentiments of advisors was shown in the latest Advisors Top of Mind Index released Thursday. The index is produced each quarter by Eaton Vance by polling 1,000 advisors about a number of topics.
In addition to responsible investing, advisors are becoming more focused on generating income for their clients than they were in the last two years, the report says. There was a 16 percent increase in advisor interest in finding income for their clients over last quarter.
At the same time, more than half (53 percent) of advisors are bullish or optimistic about U.S. equities for the next year, compared to only 20 percent who are pessimistic.
Most advisors feel good about equities, but almost the same percentage (52 percent) are pessimistic about the bond market, while only 18 percent view bonds optimistically. Almost all advisors think there will be at least one interest rate hike by the Federal Reserve this year and more than half think there will be two or more hikes. Advisors have a little more confidence in municipal bonds, Eaton Vance says.
While advisors have switched their focus away from volatility, the political environment may bring some volatility back during the year, the advisors say.