A Sustainability-Focused Investor’s Guide to Short Selling
Creating Long/Short Strategies with ESG Criteria
November 8, 2018
Short selling strategies play an important role in a complete investment portfolio. Using environmental, social, and governance (ESG) characteristics, a sustainability-focused investor can incorporate a long/short strategy into his or her portfolio by going long the firms with excellent ESG characteristics and shorting those that have poor ESG performance. Investors who are not interested in profiting from short selling poor ESG performers are unlikely to be comfortable with any short strategy and thus should be in a long-only portfolio.
This commentary is prepared by Pekin Singer Strauss Asset Management (“Pekin Singer”) for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of any security. Short sales theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase. The information contained herein is neither investment advice nor a legal opinion. The views expressed are those of the authors as of the date of publication of this report, and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of individual holdings or market sectors, but as an illustration of broader themes. Pekin Singer cannot assure that the type of investments discussed herein will outperform any other investment strategy in the future. The companies and securities referenced in this paper do not necessarily represent current or past recommendations made by Appleseed Capital or Pekin Singer to clients, nor do they necessarily represent positions we hold currently or have held in the past.