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Analyst Profile – Di Zhou

Throughout the month of March and in celebration of International Women’s Day, we are highlighting female analysts and PMs who are critical to Cambiar’s success.

What’s an investment theme you are focused on in 2021 and why?

 

Did you know…

  • Fortnite was a contributing factor in 5% of U.K. divorces in 2018?
  • We are now eating the equivalent of a credit card in micro-plastic each week?
  • A chicken has to eat two calories worth of grain to generate one calorie of poultry? A pig eats three times as many calories, and for cows, the ratio is a staggering six times!?

ESG issues are much closer to our everyday lives than the acronym. Consumer awareness has already been increasing – thanks to media and Millennials – and they will continue to shift behavior. I confess that I, like many of my peers, enjoy my fair share of retail therapy.  I was shocked to learn that the majority of fabric fibers are synthetics derived from fossil fuels, and 85% of clothing in the U.S. ends up in landfills and will not decay. All of a sudden, Prada’s nylon collection which has been revamped by using 100% recycled ocean trash, seems a bit justified for the price the brand charges.

What about natural materials? If you know it takes 10,000- 20,000 liters of water to grow a kilogram of cotton (just enough for a pair of jeans and a shirt), that old pair of jeans in your closet just regained its shine. Consumers are already voting with their feet when they are willing to pay more for an electric vehicle, a plant-based burger, or renewable energy (Colorado is one of the 13 states allowing consumers to choose to pay a premium on their electric bill to cover the extra cost of renewable energy.) Brands are keenly aware of that shift in consumer behavior.

ESG investing is no longer a niche investment strategy for a niche set of investors. ESG analysis is key to understanding the ever-changing consumer behaviors, and integrating ESG analysis with fundamental research is important in seeking to identify high-quality, sustainable companies that may offer the opportunity to generate superior returns for our clients.

Learn more about Di Zhou.

 

 

 

 

 

 

 

Disclosures

Source:

Divorce Online survey: Couples now blaming ‘Fortnite’ for divorce (cnbc.com)
You could be swallowing a credit card’s weight in plastic every week – CNN
Feed-to-Meat – Conversion Inefficiency Ratios – A Well-Fed World

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Any characteristics included are for illustrative purposes and accordingly, no assumptions or comparisons should be made based upon these ratios. Statistics/charts and other information presented may be based upon third-party sources that are deemed reliable; however, Cambiar does not guarantee its accuracy or completeness.  As with any investments, there are risks to be considered.  Past performance is no indication of future results.  All material is provided for informational purposes only and there is no guarantee that any opinions expressed herein will be valid beyond the date of this communication. 

The specific securities identified and described do not represent all of the securities purchased or held in Cambiar accounts on the date of publication, and the reader should not assume that investments in the securities identified and discussed were or will be profitable. All information is provided for informational purposes only and should not be deemed as a recommendation to buy the securities mentioned.

 

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