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Empowered Investor

Fifty-two percent of women would rather invest in companies that have a positive social or environmental impact, according to Cerulli Associates. That’s true for 44% of men.
Women seem more motivated by wanting to do good than by investment returns, according to experts. This enthusiasm may help garner more interest in investing.
Investing according to so-called ESG principles doesn’t mean they sacrifice performance.

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Women prefer investing in a way that helps the environment and does social good, some studies have found. Such values-based investing could help raise women’s general enthusiasm for investing and boost long-term wealth, according to financial experts.  
About 52% of women would rather invest in companies that have a positive social or environmental impact, according to a recent poll by Cerulli Associates. That’s true for 44% of men.

While not an enormous gulf, an eight-percentage-point difference is “meaningful,” according to Scott Smith, who heads Cerulli’s research on investor behavior. And the disparity largely remains when comparing women and men across different age and wealth bands, he added.

The trend exists beyond U.S. borders, too. About 43% of women (versus 34% of men) think a company’s stance on social or environmental issues is “very important” when deciding whether to invest, according to S&P Global, which polled investors in 11 countries, including the U.S.
“Almost every new client I get wants to invest with their values in mind,” said Cathy Curtis, a certified financial planner based in Oakland, California, whose clients are primarily women.
“And if they didn’t before, they’re asking me to do it now,” added Curtis, founder and CEO of Curtis Financial Planning and a member of CNBC’s Advisor Council.

ESG funds

Investment funds that use so-called environmental, social and governance principles have grown in popularity in recent years. These investments (also known as “sustainable” funds) might invest in firms focused on renewable energy or that promote racial and gender diversity, for example.

Investors pumped a record $70 billion into ESG funds last year — 14 times the amount just three years earlier, according to Jon Hale, director of sustainability research for the Americas at Sustainalytics, which is owned by Morningstar.
There were three times as many mutual and exchange-traded ESG funds in 2021 as there were five years ago, holding more than $350 billion total, he said.
Women are most interested in investing in companies that: pay workers a fair or living wage; are leaders in environmentally responsible practices; and that don’t sell “objectionable” products like tobacco and firearms, respectively, according to Cerulli. (Men have the same top three ESG preferences.)

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“It’s more of an emotional thing with women,” said Curtis of their ESG bent. “It’s absolutely because they don’t want to be invested in things they see as either harming the environment [or] harming women’s causes.
“They really care about those things.”
Meanwhile, women tend to invest less often than men overall: About 48% currently have money in the stock market versus 66% of men, for example, according to a recent NerdWallet survey. That’s despite evidence that female investors tend to be better long-term investors than their male counterparts.
The typical female-headed household also has less wealth: about 55 cents for every dollar of wealth held by the typical male-led household, according to the Federal Reserve Bank of St. Louis. Among household retirement accounts, the typical woman has saved $28,000, less than half the $69,000 reported by men, according to the Transamerica Center for Retirement Research.
However, ESG enthusiasm among women has the potential to make them more enthusiastic about investing overall, which might prove beneficial for long-term wealth creation, experts said.
“This definitely gets them more involved, because they care about this [ESG] discussion,” Curtis said. “They don’t care about how much large-cap U.S. and how much international and emerging markets they have [in their portfolios].”

Investment returns

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In fact, women’s values tend to override considerations relative to investment returns, Curtis added.
Among all individual investors, 70% believe sustainable investing implies a financial tradeoff — an increase from 64% in 2019, according to the Morgan Stanley Institute for Sustainable Investing. The share skews higher (83%) among millennials relative to older age groups.
However, data doesn’t seem to support this “myth,” according to Morgan Stanley.
About 74% of sustainable funds ranked in the top half of their respective investment categories in the past five years, according to Morningstar. In other words, ESG fund investors tended not to sacrifice performance for their values. (Of course, ESG funds don’t necessarily always outperform. Many have had a tough 2022, for example, largely due to technology-sector exposure, experts said.)
“For investors and advisors who have been hesitant to invest in sustainable funds because they are under the impression that such funds as a group chronically underperform, [2021] is further evidence that this isn’t true — as are the past five years,” Hale said. More

Hackers have stolen $100 million in cryptocurrency from Horizon, a so-called blockchain bridge developed by crypto start-up Harmony.
Bridges allow users to transfer tokens from one blockchain to another. They’ve become a prime target for hackers due to vulnerabilities in their underlying code.
It follows a series of similar attacks on blockchain bridges, including the $600 million Ronin Network heist and the $320 million stolen from Wormhole.

So-called blockchain bridges have become a prime target for hackers seeking to exploit vulnerabilities in the world of decentralized finance.
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Hackers have stolen $100 million in cryptocurrency from Horizon, a so-called blockchain bridge, in the latest major heist in the world of decentralized finance.
Details of the attack are still slim, but Harmony, the developers behind Horizon, said they identified the theft Wednesday morning. Harmony singled out an individual account it believes to be the culprit.

“We have begun working with national authorities and forensic specialists to identify the culprit and retrieve the stolen funds,” the start-up said in a tweet late Wednesday.
In a follow-up tweet, Harmony said it’s working with the Federal Bureau of Investigation and multiple cybersecurity firms to investigate the attack.
Blockchain bridges play a big role in the DeFi — or decentralized finance — space, offering users a way of transferring their assets from one blockchain to another. In Horizon’s case, users can send tokens from the Ethereum network to Binance Smart Chain. Harmony said the attack did not affect a separate bridge for bitcoin.
Like other facets of DeFi, which aims to rebuild traditional financial services like loans and investments on the blockchain, bridges have become a prime target for hackers due to vulnerabilities in their underlying code.
Bridges “maintain large stores of liquidity,” making them a “tempting target for hackers,” according to Jess Symington, research lead at blockchain analysis firm Elliptic.

“In order for individuals to use bridges to move their funds, assets are locked on one blockchain and unlocked, or minted, on another,” Symington said. “As a result, these services hold large volumes of cryptoassets.”
Harmony has not revealed exactly how the funds were stolen. However, one investor had raised concerns about the security of its Horizon bridge as far back as April.
The security of the Horizon bridge hinged on a “multisig” wallet that required only two signatures to initiate transactions. Some researchers speculate the breach was the result of a “private key compromise,” where hackers obtained the password, or passwords, required to gain access to a crypto wallet.
Harmony was not immediately available for comment when contacted by CNBC.
It follows a series of notable attacks on other blockchain bridges. The Ronin Network, which supports crypto game Axie Infinity, lost more than $600 million in a security breach that took place in March. Wormhole, another popular bridge, lost over $320 million in a separate hack a month earlier.
The heist adds to a stream of negative news in crypto lately. Crypto lenders Celsius and Babel Finance put a freeze on withdrawals after a sharp drop in the value of their assets resulted in a liquidity crunch. Meanwhile, beleaguered crypto hedge fund Three Arrows Capital could be set to default on a $660 million loan from brokerage firm Voyager Digital.

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General view of WeWork Weihai Road flagship is seen on April 12, 2018 in Shanghai, China. World’s leading co-working space company WeWork will acquire China-based rival naked Hub for 400 million U.S. dollars. (Photo by Jackal Pan/Visual China Group via Getty Images)
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Check out the companies making headlines in midday trading Thursday.
WeWork — Shares of WeWork jumped more than 15% after Credit Suisse initiated coverage of the office-sharing stock with an outperform rating and an $11 price target, more than double its Wednesday closing level. The firm said the company is poised to benefit from its first mover advantage.

Snowflake — The cloud data provider saw its shares advance 12.4% after JPMorgan upgraded them to overweight from neutral and said the company is “reaching an inflection point in terms of material Free Cash Flow generation.” The firm also reiterated its price target, which is about 30% from where the stock closed Wednesday.
United Airlines — Shares dropped 2.4% after the company cut 12% of flights out of Newark in a bid to reduce delays. United Airlines is trimming 50 flights on a daily basis starting July 1.
Rite Aid — The pharmacy’s shares jumped 20% after the company reported better-than-expected revenue and a smaller-than-expected quarterly loss for its most recent quarter.
KB Home — Shares of KB Home jumped 8.6% after the homebuilder reported better-than-expected results for its fiscal second quarter. KB Home generated $2.32 in earnings per share on $1.72 billion in revenue. Analysts surveyed by Refinitiv were looking for $2.03 in earnings per share on $1.64 billion in revenue. The company also reaffirmed its fiscal 2022 outlook.
Revlon — Revlon slid 11.6%, following a three-day win streak for the beauty stock that followed its Chapter 11 bankruptcy filing last week. The cosmetics maker’s shares have surged more than fourfold over the past three sessions.

Veeva Systems — Shares of Veeva Systems, a cloud-based software provider for the life sciences industry, rose 6.5% after Goldman Sachs initiated coverage of the stock with a buy rating. The firm said the company is set up for success thanks to its strong margins and lead in CRM solutions, which Goldman called its “competitive moat.”
Funko — Shares of Funko, the maker of vinyl figurines and bobbleheads, jumped 12.7% after JPMorgan upgraded the stock to overweight from neutral and said the stock has upside even as economic growth slows, calling the toy industry a safe haven.
Factset Research Systems — The financial data company saw its stock rise 8% after reporting better-than-expected results for its fiscal third quarter. FactSet reported adjusted earnings of $3.67 per share on $489 million of revenue. Analysts surveyed by Refinitiv had penciled in $3.23 in earnings per share on $477 million of revenue. FactSet also said it expected growth to be at the upper end of previous guidance for the full fiscal year.
— CNBC’s Jesse Pound and Sarah Min contributed reporting.

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Federal Reserve Chair Jerome Powell on Thursday concluded two days of testimony in front of Congress, speaking in front of House members.

In remarks for the Senate Banking Committee a day prior, Powell said the Fed understands the “the hardship high inflation is causing. We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so.”
Powell also said that economic conditions are generally favorable, pointing to a strong labor market and high demand.
Powell’s testimony comes after the Fed hiked rates by 75 basis points, or 0.75 percentage point, earlier this month. That marks the Fed’s biggest rate hike since 1994.
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Check out the companies making headlines before the bell:
Accenture (ACN) – The consulting firm’s shares fell 3.3% in the premarket after its quarterly revenue beat forecasts but earnings were impacted by the cost of its Russia exit. Accenture raised its full-year revenue forecast but cut the top end of its projected earnings range due to a greater-than-expected negative impact from foreign exchange.

Darden Restaurants (DRI) – The parent of Olive Garden and other restaurant chains reported better-than-expected profit and revenue for its latest quarter. It also increased its quarterly dividend by 10% and authorized a new $1 billion share repurchase program. Darden added 3.4% in premarket trading.
FactSet (FDS) – The financial information provider beat top and bottom-line estimates for its latest quarter. It also backed its prior full-year guidance, with growth projected at the upper end of its projected range.
Rite Aid (RAD) – Rite Aid shares jumped 4.3% in premarket action after reporting better-than-expected revenue and a smaller-than-expected quarterly loss.
KB Home (KBH) – KB Home reported quarterly earnings of $2.32 per share, beating the $2.03 consensus estimate, and the home builder’s revenue also came in above analyst forecasts. However, it said rising interest rates and higher prices were beginning to have a negative impact on sales growth. KB Home jumped 3% in premarket trading.
Occidental Petroleum (OXY) – Berkshire Hathaway (BRK.B) bought an additional 9.6 million shares of Occidental Petroleum, raising its stake in the energy producer to 16.3%. Occidental rallied 2.9% in premarket action.

Steelcase (SCS) – Steelcase shares rose 3.1% in premarket trading after the office furniture maker reported better-than-expected quarterly results. Higher prices and increased demand helped offset rising costs stemming in part from supply chain difficulties.
WeWork (WE) – The office-sharing company’s stock rose 3.3% in the premarket after Credit Suisse initiated coverage of the stock with an “outperform” rating. Credit Suisse feels WeWork is among the companies that will benefit from the increase in hybrid work and co-working, as well as demographic trends.
Snowflake (SNOW) – The cloud computing company’s stock was upgraded to “overweight” from “neutral” at J.P. Morgan Securities, which pointed to an attractive valuation as well as extremely high satisfaction levels among Snowflake customers. Snowflake surged 6.1% in premarket trading.
Revlon (REV) – Revlon slid 5.7% in the premarket, signaling a possible end to the three-day win streak that followed its Chapter 11 bankruptcy filing last week. The cosmetics maker’s shares have surged more than fourfold over the past 3 sessions.

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Can natural gas ever be a “green” investment? Burning any fossil fuel inevitably makes the planet warmer. Yet switching power stations to gas from more carbon-intensive coal has helped countries cut their total emissions in the past. Environmentalists counter that global temperatures have risen so much that all fossil-fuel use needs to be ended as quickly as possible if the world is to meet the targets laid out in the Paris agreement to limit global warming to “well below 2°c”.European institutions cannot agree on the question among themselves. The European Commission’s proposal for a “green taxonomy”, a classification scheme that aims to guide sustainability-minded investors, says the fuel can count as green provided it acts as a “bridge” to more renewable sources. The European Investment Bank (eib), the eu’s state-backed lender, by contrast, has virtually ruled out investing in natural gas as inconsistent with its climate commitments. The eib is not alone. Multilateral development banks (mdbs) that channel money from rich countries towards worthy projects, such as the World Bank and the Asian Development Bank, have in general turned away from financing natural gas. In 2018 they signed a joint statement saying they would align their lending with the Paris goals, giving them limited scope to invest in the fuel. Few mdbs lent as much to gas projects as the eib did before it said in 2019 that it would start phasing out such investment. Researchers at Boston University calculate that the eib provided more than half of the $63.7bn invested by mdbs in natural gas between 2008 and 2021, mostly for transmission and storage. (That is a tiny fraction of the total amount invested in energy worldwide, but mdbs argue they help catalyse private investment.)The return of coal provides the case for restarting spending on gas. Eager to move away from imported gas from Russia, on June 19th the German government announced it was restarting some previously mothballed coal power plants. Investing more in Europe’s gas infrastructure—such as pipelines, terminals for liquefied natural gas (lng) imports and storage facilities—could alleviate a shortage of natural gas and keep the continent from having to switch on such plants. At present, bottlenecks prevent lng imports moving from the continent’s terminals, which are mostly in the west, to the eastern and central European countries that need to swiftly wean themselves off piped Russian gas.What does the tension between the commission’s vision of “green” and the eib’s thinking mean for increasing investment in gas? Some think the implications are limited. If there is indeed a business case for gas in Europe, then the private sector could simply finance it, says Sonia Dunlop of e3g, a think-tank. Scarce public money should be used elsewhere.But the disagreement over the question of investing in gas hints at a deeper problem. Whether it is deemed green or not, gas is an increasingly unattractive investment, the high prices for the fuel after Russia’s invasion of Ukraine notwithstanding. Both private and mdb investors worry that gas infrastructure could end up “stranded” as regulatory changes or technological improvements render them unprofitable. mdbs that lend to poor countries are worried that such investments might leave taxpayers saddled with debts for worthless assets. Even the commission’s taxonomy classes the fuel as “green” only until 2030. And as long as everyone agrees that gas is dirty in the long term, there is little incentive to invest today. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

Europe’s annual Money 20/20 conference is where the rock stars of fintech come to cut deals and court investors. The shindig this month, the first proper extravaganza since 2020, had the added buzz of a long-awaited reunion, enhanced by djs and brass bands. “Money 20/20 is back in full technicolour,” trumpeted Tracey Davies, the master of ceremonies. The tone, however, was out of sync with the mood outside the room. Rising interest rates and the threat of an economic slowdown are hanging over the industry. Many listed fintechs have seen their market capitalisation crash by more than 75% since July 2021; private firms are being forced into “down rounds” that value them at less than their previous worth. In recent weeks a sorry cast of multi-billion-dollar fintechs, from Klarna, a “buy now, pay later” (bnpl) firm, to Wealthsimple, a trading app, have announced layoffs. In total, fintechs have sacked about 5,500 employees since May 1st, according to Layoffs.fyi, a website, compared with none last year. The woes are in stark contrast to the exuberance of 2021, which was fuelled by the surge in digital finance and investors’ hunt for returns. Last year financial startups raised $132bn, more than twice their haul in 2020; fully 150 of them reached a valuation of $1bn or more. Now backers are wary—especially “non-traditional” venture capitalists, such as sovereign-wealth and pension funds, that piled in late in the cycle. Some vc investors are pulling out of deals after they are signed.For many insiders, the downturn serves to clear froth from the market. “There was a lot of greed,” notes Vidya Peters of Marqeta, a debit-card firm. The thinking is that the current turmoil will be limited to a correction in valuations, and that the secular trends that have propelled fintech so far remain in place. “Very little has changed,” says Rana Yared of Balderton Capital, a vc firm. Recent declines, she points out, have pushed back many valuations only to the levels of early 2020.Yet the funding crunch could inflict real damage. Olivier Guillaumond of ing, a Dutch bank that also invests in fintech, says he is advising firms in his portfolio to raise debt rather than equity, to avoid diluting valuations. But that means more borrowing just as rates are rising. vcs are also asking startups to hoard more cash to guard against shocks. The boss of one “neobank” says he is planning to cut his marketing budget by 75%. That, however, could compromise the growth on which valuations have tended to be premised.Worse still, business models are exposed to a souring economic environment. Many fintechs rely on the securitisation of loan and credit-card portfolios, or wholesale funding from banks, to fuel their credit operations, leaving them vulnerable to rising interest rates. Declining household incomes and reduced consumer spending could spell higher default rates and lower fees for payments firms. The tide is turning in other ways. Some firms had sought to exploit loopholes that helped them avoid some of the regulatory burdens faced by banks; many of these are now being closed up. Others have seen their products commoditised as rivals have swarmed in. bnpl has been hit by both problems. This month Apple said it would launch a bnpl service in America.Large fintechs with ample cash are responding to the crunch by diversifying faster. Wise, which provides cheap cross-border payments, has launched a stock-trading platform and business-accounting tools. Stripe, a payments giant that raised $600m last year, has branched out into business loans and card issuance. John Collison, its president, says the firm is considering expanding the services it offers. Banks and credit-card giants, meanwhile, are on the lookout for bargains as startup valuations tumble. The very first session of Money 20/20 saw the boss of Visa Europe waxing lyrical about becoming a “network of networks”. Mastercard had sponsored one of the stages at the conference. The incumbents, in other words, are crashing the party. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

Thirty years ago, Britain’s snap decision to withdraw from the European Exchange Rate Mechanism made George Soros, a hedge-fund titan, more than $1bn from his short positions against sterling. Hedge funds may not be the financial giants they were in 1992, but some speculators still aspire to “break the bank”, to borrow the phrase used to describe Mr Soros’s bet. This time, it is not the Bank of England but the Bank of Japan that the would-be bank-breakers have their eyes on.The boj stands out like a sore thumb in the world of monetary policy. While the Federal Reserve, the European Central Bank and the Bank of England are rushing to combat inflation by reversing asset-purchase schemes and raising interest rates, the boj is sticking to its guns. After a meeting on June 17th it left its policy of “yield-curve control”, intended to keep yields on ten-year Japanese government bonds at around 0%, firmly in place. As the gulf between Japanese and rising American bond yields has widened, the yen has plunged: by 15% this year so far, to its lowest level against the dollar since the late 1990s.The boj adopted yield-curve control in 2016 as a way to maintain monetary stimulus, while slowing down the frenetic purchases of Japanese government bonds that it had been undertaking since 2013 to boost inflation. For most of the time its yield cap has been in place, the mere promise to buy more bonds if anyone tested its resolve was enough to keep a lid on yields. More recently, however, that commitment has itself been tested. In the five days to June 20th the central bank was forced to buy government bonds worth ¥10.9trn ($81bn) as it sought to suppress yields. By contrast, between 2015 and 2021 it never bought more than ¥4trn in a five-day period.Some investors are betting that the boj will eventually be forced to alter, or even abandon, its target. BlueBay Asset Management, an investment firm with more than $127bn in assets as of September 2021, is short-selling Japanese government debt. Mark Dowding, the firm’s chief investment officer, has called the central bank’s position “untenable”. Volatility in the typically calm Japanese government-bond market has surged to its highest level in more than a decade. The investors betting against the boj might be taking hope from moments when central banks abandoned similar commitments. Late last year the Reserve Bank of Australia’s yield-curve control policy, which targeted three-year Australian government bonds, collapsed spectacularly as yields surged and the central bank failed to defend its target. The Swiss National Bank insisted it would not break its currency peg to the euro in the months leading up to January 2015, before doing precisely that. So far, however, neither Japan’s economy nor the central bank’s internal dynamics hint that a change in policy is coming. Inflation has risen, but not exploded as in other parts of the world; consumer prices rose by 2.5% in the year to April, compared with 8.3% in America. Excluding fresh food and energy, Japanese prices are still up by less than 1% year-on-year, and wages by less than 2%. There is little sign of domestically generated price growth.The weak yen, meanwhile, has a mixed effect. It drives up imported inflation and magnifies the effect of rising dollar-denominated oil prices. But after many years in which Japan’s price level has barely budged, a shallow increase does not seem an urgent threat. Even with all these external shocks, inflation is barely above the central bank’s target of 2%. Rapid moves in the currency make planning difficult for businesses, but a weaker exchange rate benefits many exporters of manufactured goods, as well as the holders of Japan’s ¥1.2 quadrillion in overseas assets, which have gone up in yen terms.Nor does the mood within the boj so far hint at a coming change in policy. The central bank still has several monetary doves in its roosts. Kataoka Goushi was the sole board member to vote against holding policy unchanged in June, but because he wanted even more stimulus, not less. In early June Wakatabe Masazumi, the bank’s deputy governor, said that monetary easing should be pursued to maintain wage growth. And Kuroda Haruhiko, the governor of the boj, is a longtime advocate of monetary stimulus to revive Japan’s sluggish economic growth.Mr Kuroda is now into the final year of his term. His replacement may well be Amamiya Masayoshi, another deputy governor, who is so entrenched in the institution that he is known as “Mr boj”. Mr Amamiya has sometimes been seen as more hawkish than Mr Kuroda. But in his most recent comments on monetary policy, in mid-May, he spoke in favour of continuing current policy without reservations. Barring a change to the domestic picture, or a groundswell of hawkish sentiment within the boj, investors expecting a u-turn are likely to be disappointed. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More