Quantitative Equity: Low Carbon and Low Volatility
Quantitative Equities Team
Headline environmental incidents like uncontainable wildfires and melting polar ice caps are reminders of the challenges posed by climate change and highlight the societal need to transition to a low carbon economy. As new environmental, social and financial risks arise from climate change, climate-aware institutional investors have increasingly been taking steps to lower their exposures to fossil fuels and CO2 emissions in order to mitigate carbon-related risks and better position themselves for a low-carbon future.
In this article, TDAM's Quantitative Equity Team will try to align low volatility investing and low carbon objectives. More specifically, we will examine whether a Low Volatility investment strategy can have minimal industrial and sectoral carbon exposure, without compromising its defensive qualities and investment performance.
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