The Right Way for Retirement Savers to Approach ESG Investing With Liz Simmie
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Trust your gut reaction. It's correct. I promise you, whether you're running a $50 billion pension or you have $5, your gut instinct is correct on this. Welcome to the Stay Wealthy Podcast. I'm your host, Taylor Schulte. And today I'm covering a topic that hasn't been tackled here on the podcast, and that is ESG investing.

ESG stands for environmental, social, and corporate governance. And because the world of ESG is messy and complicated, I asked Liz Simme, co-founder of Honeytree Investment Management, to come and help us break it down. Liz is wildly knowledgeable about purpose-driven investing and addresses three big questions in this episode.

Number one, what is ESG investing in plain English? Number two, how retirement savers should approach fees when investing in ESG funds and solutions.

Number three, what's the most important data point to screen for when choosing an ESG strategy? So if you want to learn the right way to approach ESG investing and how to integrate it into your retirement portfolio, this episode is for you. For the links and resources mentioned, including links to some of Liz's favorite ESG research, head over to youstaywealthy.com forward slash 109.

So I want to kick off today's conversation really simply by just asking you in plain English, what is ESG investing? And I know there's some other acronyms out there. SRI gets thrown into the mix. So what does ESG investing mean? Is there a difference between SRI and ESG? And just kind of start there and we'll dive deeper. So SRI, so socially responsible investing, is kind of the original ESG. And what happened, I'm going to give you the whole history because I think it's interesting.

Even before the apartheid, but the apartheid was kind of the big moment, investors started using their corporate investments to get companies to divest from South Africa for participation in the apartheid. And this was the Quakers and various religious groups and mission-driven investors. So those investors also were traditional SRI. They didn't necessarily own guns or gambling. The traditional exclusionary, let's take bad things out of the portfolio. So that's kind of how the whole thing started.

And then now the terminology is a big, big confusing mess. You have impact, you have SRI, you have ESG, and they're all completely different at the same time. They all completely overlap. Super confusing.

So ESG investing, the way we think about it and the way we do it, not necessarily the way everybody else does it, is we think ESG, ESG refers to non-financial data for us. There's financials and then there's non-financial data. And it's been bucketed into ESG, environmental, social and governance. We don't actually think it should be bucketed in those, but those are kind of explain lots of the non-financial data out there.

And so ESG investing for us is using that non-financial data equally alongside financial data to assess the long-term potential performance of a company.

And that goes against a lot of traditional financial beliefs. We are the bottom line and shareholders are all that matter. And what we're saying is while employees and customers and their safety and their pay and water use and environmental stuff also all matters to the bottom line. So that's kind of ESG from our perspective. At the same time, what we do is also impact the companies we own make giant impacts on the world.

And on the other end, we exclude guns and weapons and tobacco and all that kind of stuff. So that's where it gets really confusing. There's a lot of ways to do it. And ESG doesn't just need to be in public markets. It can be in private markets. And same thing with impact. Impact doesn't just need to be windmills and electric vehicles. Impact can be any company on any scale. It's a question of how positively they're changing the world. So that is the short, long, confusing answer of what is ESG.

Okay. This term non-financial data gets thrown around a lot, especially when talking about ESG investing. I know I've heard you say it several times. Can you just give our listeners an example of a few metrics that relate to non-financial data and maybe the same for financial data? So like traditionally, what are analysts looking at in terms of financial data? What are some examples there? And then non-financial data, what are some of those things that you guys are looking at?

Yeah. So we, for example, look at cashflow growth. So over the five-year history, how has this company grown their free cashflow relative to another company?

At the same time, we look at how they've improved their diversity and leadership roles, gender diversity and racial diversity, not just set goals and targets for it. Right. Like nobody would look at financial goals for free cash flow five years out and say, these guys are great. You have to look at the actual evidence of it. So just on the workforce side, diversity, there's board diversity, diversity.

There's executive team diversity. Then there's leadership diversity. There's professional levels or technical roles. And then there's whole workforce diversity and how that's improving year over year, we think is essentially equivalent to looking at any of the financials and their improvement year over year, whether it's dividend or revenue or free cash flow.

On the non-in-workforce data, so I generally lump non-financial data into workforce and environmental, just to be super confusing, not ESG. And so workforce is diversity, turnover, pay equity, parental leave,

Those types of things, environmental, you have water use, emissions, waste, how much they're changing their supply chain to use recycled inputs, all these kinds of things. And I think a lot of people intuitively understand how they would impact the bottom line. It just unfortunately doesn't fit very well into our traditional models.

where shareholders matter more. And a lot of the pushback to ESG in the investment industry is the belief that by adding in this stuff, this non-financial data into our analysis, we're going to reduce returns. And I think there's lots of ways active managers, for example, reduce their returns. And ESG could be one of those things. I think also

how if you do it properly, you can actually increase returns because these are more responsibly growing companies. These are more stakeholder governed companies. And I don't think it does go against traditional beliefs in finance, but I think a lot of people believe that companies doing less harm, trying to improve the world will win in the end in terms of long-term performance. So it's a very interesting dilemma, but I like using non-financial because ESG is

keeps it really separate. It separates the data from the financials. Then it's seen by a lot of portfolio managers, even ESG ones, as a secondary set of data. And so I like to call it non-financial because it kind of makes it a little more equal to financial and it gives it a better title than just ESG data. Setting aside the fact that maybe some or maybe a lot of managers just approach ESG the wrong way, or maybe you think that they're approaching it the wrong way, just kind of setting that aside for a

Sticking with this idea that ESG investing underperforms broad market indexes, one of the things that I shared with you that I'm still stuck on is that in general, at a retail level, getting access to ESG strategies, an ESG mutual fund or an ETF, on average is more expensive than a broad-based index fund called a Vanguard-type ETF.

And at least my philosophy, and I'd be curious to hear yours, is the more we pay in investments, the less we have in our pockets. Vanguard's done some studies that say cost, the underlying cost of your investments is the best predictor of future returns. And so that's where I start to get stuck is that it costs more to invest in ESG strategies, and therefore I'm probably going to have a lower rate of return there.

Would I rather try and target a higher rate of return by building a lower cost, more sound portfolio, and then use that extra return to do good with it? Maybe I donate it to the organizations that mean a lot to me. How do you think about that? How do you reconcile costs and returns and approaching ESG at a retail level? So I'm an active manager, but I'm an active manager that speaks regularly about active managers underperforming because we do it.

It's not just our fees. It's also chasing ideas, lack of evidence-based approaches, a whole pile of things that lead to overpriced products that aren't doing what they're supposed to do. So I'm very happy to say that as an active manager. I think most folks, whether they're with an advisor or on their own, I think a fully passive portfolio is actually a better option than attempting to do a lot of active stuff. That being said, I am a big believer in active. So

I think one of the reasons we're very interested in an ETF, and your audience is mostly American, but in Canada, what's happened is we have a lot of active ETFs. And so instead of a fund, like Honeytree will eventually be an ETF, instead of us going into a fund at 1.2, we'd go into an ETF at 0.7%.

management fee. And so that and using SMAs, which I guess are generally under half a percent fees, is the way we address it for the folks who use active. And that's one of the reasons we launched our product. There wasn't a lot of true ESG in core active equity. That being said, there's some legit good ESG in low cost systematic. In fact, I don't generally recommend funds in ETFs because I'm not an advisor, but there's some legitimately good sub-

30 basis points, ESG products out there that are just as good on ESG as a bunch of the active strategies or even better, whether that's an ESG rating or what they're holding. So I think there's actually, if you go through them, if you're a self-directed investor, I think

you can find some really good stuff under 30 basis points in ESG. And so then whether it's 10 or 15 or 20 or 25, it's pretty negligible in terms of the fee and you're still getting pretty high quality ESG. I think you can do the same in active. I think it's harder. There's fewer products. A lot of MSCI and Selective run a lot of end to see based products or like fossil fuel free versions or impact versions. And some are actually pretty good. I mean, there's a whole bunch of

ones that aren't. So I do think there's a huge option in there and we make impact in everything we do. You can make impact by volunteering. You can make impact by your job. You can make impact by donating. You can make impact by directly investing in something. And despite all odds, you make impact by holding a large company. And it doesn't make sense when you think of just one person investing, but the same investments are being invested in by large pensions who are

taking care of thousands, if not millions of workers. And so that size and that holding and their investment decisions do matter. And when you aggregate everybody, it does matter. And it's not about flows and punishing companies and not holding them. It's that corporations need investors on their side for a variety of different things. And you just look at issues with worker safety or

or product safety, right? These things matter. And shareholders, whether they're activists or pensions or nuns going into meetings, can speak out and do these things. So the idea that it's all impact, whether it's a personal donation or a stockholding, every decision we make creates an impact. And there's a lot of ways to do it right. You could run a 90% traditional portfolio and put

10% into a municipal bond focused on affordable housing. And you might be making actual more net impact than, you know, a whole ESG portfolio. So it's really, I think the important thing is to just think about the big picture of everything, right? It's much more than just, hey, reducing emissions is going to solve all the world's problems, right? Or having more gender equity is going to solve the world's problems. It's much bigger than that.

And it's everything we do, right? And I think the end ESG investor or impact investor

does this in their daily life and they also want their investments to work for it. You know, if you are a large pension that has a unionized workforce and you're investing in Amazon, who's spending a lot of money stopping union movements, eventually your stakeholders are going to get pissed off. There's nothing wrong with owning Amazon, but a union who's spending a

against a company that they own, who's also spending a lot of money advocating for unions, you can see where that gets all messy. And you know, whether you hold shares in Amazon, it's not your fault. But some of these pensions are very large. So it's complex. And it's not just passive or active, we can make the world better in every asset class and in every activity.

Sticking with the active versus passive thing here, when I think about just active strategies in general, I immediately just start thinking about active equals lower returns. We're making a bet. We're stripping certain securities out of the portfolio and making a bet that the securities that we do keep are going to outperform. It sounds like, and correct me if I'm wrong here, it sounds like

Maybe in general, you agree with that, but the way that you approach building an ESG portfolio, you believe actually has higher expected returns. And please correct me if I'm wrong there. And then kind of the second part of that is I heard you say in another interview that purpose driven companies outperform broad market indexes over the longterm. And I was just curious, like, is there historical data around that or are those future projections based on the research that you guys have done?

So I was trained in a shop that ran a quantum mental model. And all that means is we used traditional fundamental research and quant process in our research. And the strategy itself was pretty similar to the honey tree one. It was really about long-term consistency of dividend growth, high dividend growth.

And those companies were very focused on the long-term. And what happened with the portfolio performance over a decade was that all the outperformance came on the downside. So these more boring, long-term focused companies, even though I was not in an ESG shop,

managed to recover faster when the market went down, basically have much better downside. So the months that market goes down, it goes less and aggregated over five years. That's where the performance came from. And that outperformance, so there is not an academic paper written on purpose-driven companies outperform over the long term. That is me.

saying that there is academic research on good governance and stakeholder governance and how that impacts company return, just like there is on diversity. There's a lot of academic research on diverse teams outperforming, reducing risk and all this stuff. So we kind of bring that all together. I was only raised in an active shop. And the reason we believe, and we have back tests and stuff too, we believe that the purpose with which our company is driven, the impact that they make positively on their stakeholders is

is what drives their returns over the long run. And you just have to look at Costco for that. Costco has overpaid their employees for a decade, yet they've done pretty good on the bottom line. Costco's average hourly wage for US workers is $25 an hour. So if people think that paying your employees is bad for the bottom line, paying them well and decently, there's a lot of evidence to the contrary. Now, the problem is a lot of companies

aren't stakeholder governed or purpose driven. And we knew that when we started, we were trying to find a very select group. So really what we're trying to do wouldn't work in a broader sense. And I think you're right. One of the major detractors for active management is this idea that we're just going to put a bunch of constraints on things. In fact, that was the pushback from all the portfolio managers I knew when we started Honeytree, which was you're going to add ESG constraints

you're going to reduce performance. And the fun part is we outperformed them since we've started, but then that's a little bit more of a sector and selection issue. But the point is we're not adding in constraints. We're adding in additional information to understand if this company's stakeholders are governed. And because we do it that way, because we're really taking an evidence-based approach, it can work. And so there's about 10%, maybe 5% of companies

public markets, like equities, large cap managers who can outperform over 10 years. I was just lucky to work at one of those and kind of figure out

what was making that happen in it is discipline and process, but it's having a discipline and process that's actually going to work. And we've been lucky that we've been able to integrate this non-financial data without impacting performance. I was never concerned that it would, I was pretty sure having improvement in diversity and reduction in environmental stuff would lead to outperformance given the academics, but it's a really interesting, um,

perspective that we have, right? And I get that question all the time. Well, if you take out fossil fuel, aren't you going to underperform when it goes up? Well, sure, but we're going to underperform when anything that we don't have in the portfolio goes up. At the same time, you could have beat the index significantly without holding any FANG stocks over the previous decade. And I was lucky to, again, work in a shop that held none of the FANG stocks. And

in an active strategy. So I totally agree. There's a lot of, I mean, there's probably more ridiculous active strategies out there than there are ESG, which coming from me is kind of ridiculous since I throw a lot of ESG strategies under the bus, but I think there's hope. And I think it's part of it is our industry is just so old school. Like we're just a bunch of dinosaurs in golden buildings and

and we live in the 70s. You just have to look like women portfolio managers. We're 10% in the year 2000 and we're 10% in 2021. Our industry has made no progress. Advisors have gone up probably from like 12 to 15% women. We still don't talk about racial diversity and that issue is impacting both active management and being stuck in traditional processes and ESG being stuck in traditional processes.

So yeah, that's my argument against the hope that active stripped out to 20 companies because that's all we own can outperform. But I completely understand based on the evidence why folks don't think that's possible since most active cannot do that.

Sure. I appreciate that. And I do have some more questions around diversity, but really quick, just putting ourselves in the shoes of a podcast listener who invests their money through Schwab or Fidelity or Vanguard, and they're interested in adding ESG to their portfolio in a simple way through a mutual fund or an ETF. What are some things that they should be looking for? For example, maybe cost is one of them, right? We want to target funds that are maybe below 30 basis points or 0.3% per year.

So maybe cost is one of those screeners. What else might they be looking for? Is there a kind of sorting through some of these funds on whatever brokerage platform they're using?

Maybe second to that, I know Morningstar is one company that delivers SRI ratings or puts SRI ratings on different funds. Is that something that they should pay attention to? How can they read through some of this noise and figure out what's a decent strategy to consider adding to their portfolio? Yeah, Morningstar is the best database for passive active somewhere in between vehicles, especially in the US. And then you go and you look at the portfolio tab and you can scroll down and you can see ratings and some other stuff.

So that's the best place. I mean, honestly, I'm a big fan of just looking at the top 10. If you're trying to find a S&P 500,

X fossil fuel, and they have X on in the top 10, you probably don't want to add that, right? It kind of depends what you're looking for. So here's how it works. A lot of ESG products are environmentally focused, whether they're active or systematic. So there's a whole bunch of stuff, fossil fuel free, environmental futures, that kind of sustainable future products that are skew mostly environmental products.

Again, Morningstar and looking at the holdings. Eventually some of these platforms will have internal ratings, but I think we're farther away from that. The other set of products that are there are the holistic ESG, kind of like what we do. There's Petnum and Calvert on the West Coast. I can't remember. There's a larger First Affirmative who have a broad set of ESG offerings, kind of in a bunch of price ranges, mostly active. And then there's things like gender equity ETFs and specialty ETFs.

thematic ones that can be cheap or expensive just depending on if they're systematic or not. So really, I mean, there's so many products out there. Your fund family likely already has one that you're using, right? If you have, if you're using a lot of Vanguard or whatever. So check those out. They're not necessarily any better, any worse. One thing is most of the systematic and the passive stuff will be based on somebody else's index. Right?

And that's usually MSCI or Selectival. The S&P has ones now. So you'll see a bit of a variation and difference. And you'll also see, who is it? iShares has some pretty interesting below 30 basis points products. And they're all MSCI based and they're all very different.

So, I mean, just even looking at a handful of products, you know, if you're a self-directed investor, you'll get a pretty strong feel for what's available in the price point that you're willing to. And then you can look at Morningstar. I mean, Morningstar ratings are based on Sustainalytics too.

If anybody wants to get in slightly more depth, the two other locations that I suggest is, especially if you're picking individual companies or you're trying to assess an individual company in that top 10, MSCI and Sustainalytics publish all their ESG ratings for free on their website. So if you just Google Sustainalytics ESG ratings or MSCI ESG ratings, you can pull those up. And the other place, if anybody's buying individual securities or again, checking on

is this holding really ESG? Go to the company's website. Everybody has a sustainability report. Now everybody in the US has to release their diversity disclosures or they have to give them to the government. They don't have to release them. So there's a whole bunch of ESG work

going on getting companies to release their diversity data. It's really fascinating. And you can get a pretty good feel for a company pretty quickly by looking at their ESG section on their website or their sustainability report. It's really just Morningstar for the funds though. Similar to organic food, all natural food, it's kind of become a marketing and a branding thing. And I think the same thing is happening or it has happened in the ESG SRI world where the

These fund companies or even companies in general have found workarounds to kind of get this stamp of approval saying that we're an ESG focused company or SRI. How can an investor kind of read through some of that marketing and branding and really find out, is this really a purpose driven company?

I personally like to look at the diversity of their portfolio management team. Yeah. So let's talk about diversity then. Cause that's where I was headed and I know it's something you're really passionate about. You mentioned diversity data now becoming more and more available to

I also know that when you're looking at a company, you're screening for boards with 30% diversity or 30% or more diversity. Maybe just start off by talking about what are you looking at in terms of diversity? Maybe just like define diversity and why you use that 30% number and why diversity is so important when you're evaluating a company.

So almost every ESG data set and every ESG firm approaches diversity through a gender-only lens.

So it's woman, woman on boards, woman on the executive team, woman in the workforce, woman on leadership. And that's happened for a couple of reasons, mostly because Europe's pushed it a lot. They just didn't care about racial diversity. And so a board has to be 30% diverse beyond gender to get into our consideration set. So what that means is if we could look at LGBTQ or disability, which I think maybe in about five years, we'll have more robust reporting on, we would look at that. So for now we look at,

racial and gender diversity. And we define that as anyone who is not a straight male of the dominant race of the country that the company's located in. So that answers the, how do you deal with Asia question and other jurisdictions? Is it perfect? No. Um, does it align with what's being done? Yes. And what's being done in the U S and why you guys are actually way ahead on this compared to Canada and Europe is,

is there is a Department of Labor workforce report called the EEO-1, and every company in the U.S. over 50 needs to file it. And what it is, is it's the workforce demographics at each level. So executive, senior leadership, technical roles, and workforce broken out by gender and racial diversity. So that's kind of what we're following. And that's why the U.S. is ahead on reporting this stuff. So then why does it matter at all?

Well, for our purposes in building our portfolio, if a company hasn't figured out how to get to 30% board diversity yet, we don't want to look at them. We think it shows their stakeholder governance, their commitment to the future, their understanding of the impact they make on their local community. If you are underemploying women,

or Black folks in a community because your hiring's biased and you have pipelines that are avoiding those folks. And when they finally get jobs, your culture's toxic and they leave, which describes most asset managers. You're going to have an issue five or 10 years down the line. And whether that's because big pensions are going to come in and ask for your team diversity, or you're going to have lack of innovation,

or ability to deal with problems and risks on your team because it's all guys from the same school on the same sports team. So there's a whole bunch of reasons why, but really it is for us about, we wanna own the most responsibly growing companies in the world. We have companies in our portfolio with 70% board diversity.

But we really, for our bare minimum requirements, for us to consider you the short list for purpose-driven stakeholder governed companies, especially at this large scale, we're looking at companies over 5 billion, by the way. We have to lower this number in Canada to 25, by the way, when we do our Canadian equity. And we'd have to lower it to about 20, I think, to do an emerging markets product, which is fine.

But for what we're looking for, this concentrated set of companies that we're holding, this is our threshold. And we're going to up it to 35 this year. To clarify and summarize, is it fair to say that in your opinion, an irresponsible company, a company that's not focused on board diversity or diversity in general, is more likely to underperform going forward over the long term? Is that fair to say?

It's more fair to say, I think, that companies who are ahead of the curve on all aspects will outperform over the long run.

I could probably make an argument to say what you said. I think companies that are shows of governance who are running around trying to solve problems after the fact are in trouble over the long term. I think lots of companies have succeeded without diversity or caring about the environment. But, you know, I think the environmental regulations are a little bit easier. People understand that somebody is going to get sued for dumping waste into rivers and killing people.

I don't think it's as clear on the workforce and diversity, how the regulations are coming. But, you know, you just look at the UK, the UK required in 2019, every company over a certain size to disclose their pay equity gaps just based on gender. And even the best had more than 10% pay equity gaps. So you can ignore this stuff.

Or you can have a good board who's already working to mitigate the future effects of this type of regulation. So it's really tricky and messy at the same time. We're only going for 20 companies and we're really responsible. Growth can be done in many ways, but it can't just be done as a product solution with disregard for the rest of the business.

And is it your personal hypothesis that more diverse companies on all levels are more likely to outperform in the future? Is it a personal opinion or hypothesis of yours? Or is there some data to support historically that more diverse companies do in fact outperform? Oh yeah. MSCI has got a bunch of studies, JP Morgan, all those folks have done. And there is a lot of academic research on board and team governance and diversity, which also backs that up.

So it's not me making it up. Okay. I didn't insinuate that, but I'd love if after this, you can share some links to some of that research. I'd love to share that in the show notes with everybody. I talk a lot about using data and making informed decisions. So, and I'll help dig some of that stuff up as well. Anything else that you'd like to share around diversity and as it relates to ESG? One thing that's really fascinating, Canada's a little bit ahead on caring about ESG, but we don't have any diverse manager programs up here.

Whereas the U.S. is a little behind on ESG, but I think there's a significant, whether it's retail investors or advisors or institutions who are thinking ahead of the game. Like, what about the teams that are managing our ESG? What about the owners of the firms that are managing our ESG? So I just wanted to congratulate all of you for actually thinking about this stuff because it's actually ESG is not just about the product.

It's about the end company that we're invested in and them continually improving. It's about our firm continually improving or whichever firm you're giving your assets to, whether it's Vanguard or BlackRock or Honeytree or whoever.

And it's about us as an industry improving, right? Like we can't keep on launching gender equity ETFs or net zero products if we don't believe in either of those things because it's not fair to the end consumer. And it's not just because the products won't be as good because they're built incorrectly. It's that they're being lied to as a consumer. It's like organics.

right? Is organic food, I love the organic food debate. What's better for the environment, locally grown greenhouse food in Toronto or organic food shipped from South America?

or flown in from South America, right? And we're not talking, we're saying, oh, organic is the solution to everything. Well, what about poor folks? Just like the electric vehicle debate, electric vehicles are great, but a third of Toronto doesn't own cars. So where's our industry talking on public transportation and bicycles? We're not, right? So it's a lovely mess. And I think people outside of the investment industry have a better ability to look at it holistically because they're not as...

skewed by traditional theories and beliefs in investing.

I know you're a bit biased here, but I'm confident you can be objective. When you think about portfolio construction and where ESG fits into somebody's asset allocation, do you think about ESG being like an all or nothing thing? Like I'm either going to invest and build a portfolio that's purely focused on ESG, which I know is a bit challenging because we're limited in our options unless you literally want to go handpick individual companies, which is a lot of work.

Do you look at it like that? That's kind of an all or nothing thing. Or does ESG live as like a certain percentage of an allocation, you know, 10% allocated to ESG or 15 or 20%. How do you view that from like a global asset allocation level? That's a problem we were actually kind of trying to solve with our product. It seemed like it was pretty easy in Canada. And I think this was true in the U S to build a semi ESG systematic product.

strategy across your whole public market side of your portfolio. And for folks who weren't passive, which is the other chunk of the market, it wasn't as easy. There wasn't many core ESG strategies out there, strategies that you would hold as a core positioning. There was a lot of thematics. So these environmental solutions, future gains, gender equity. And I don't believe

People will end up building their portfolios, 10% gender, 10% green future, 10% renewable innovations, 10%, you know, muni bonds. I don't think people are going to change their asset allocation because

So I think what it is, is some folks, and this is how a bunch of institutional folks do it. Some folks don't believe that public markets make any impact whatsoever or, and that ESGs, they just want the best active managers that they need to do that traditionally. Then they allocate five or 10% of their portfolio to true impact. So that's how a whole bunch of folks do it. But I think there is, whether you're systematic or passive or truly active or a combination,

You can, if you wanted to, you can do it across your whole portfolio. It's just a question of research. I mean, it's no different than finding good strategies to put in your portfolio. There's just fewer of them.

which is fine. That's why we had to start our firm so that one day there was more strategies. But I think you could actually build a legitimate, fully passive or systematic all ESG slash impact slash making the world better now, especially in the US because you guys have more products.

Sure. Well, you mentioned your firm, you mentioned Honeytree. Before we hit record, you were saying that you guys are working on SEC registration and making your way into the US and potentially getting into the ETF market here. Talk to us about Honeytree, what you guys do right now, what future plans look like, how podcast listeners can kind of stay in touch with what you're doing and maybe get access to your solutions in the future.

Absolutely. So we are a very small, completely woman-owned asset manager out of Toronto. We've almost hit our two-year track record. We're the fourth woman-founded asset manager in Canada. That's kind of why we had to start our firm. And really, I think there's under 60 in the US. So-

And really, we had the experience to do it. So the best place to find out about us is our website, honeytreeinvest.com. We've got a whole bunch of material there, a bunch of our blogs and our thoughts. A lot of stuff echoes what I talk about on podcasts. And you can sign up for our newsletter. So that's probably the best place to follow what we do and get updates on US or Canadian product or

or registration availabilities. We run a global equity strategy with 20 positions. So we're more concentrated. We will, for those of you who have advisors and those advisors use SMAs, that's kind of the market that we're going to be focused on in the US because there is no RIAs in Canada until we have a ETF or

or mutual fund vehicle available so that advisors and direct investors can access us. But we haven't done those because they cost a lot of money and we're a very cost conscious firm. And we're trying to grow responsibly just like our investment strategy and the companies we invest in. Okay. And when did you start the company? We were registered in 2019, May 2019. So we're almost coming up on two years of registration in Canada.

Great. Very cool. Well, I really appreciate you coming on today. I will be sure to link to your website, your newsletter. So if people want to follow along and stay in touch as you make your way to the US, I'll make sure they have access to everything. Before we wrap up, is there anything else that we didn't touch on that's really important to you that you want to make sure you share with our audience in regards to investing or financial planning or ESG, SRI, anything, anything else you want to share?

I just think follow your skepticism because it's right. I get from every single person in the world, whether they are a giant allocator managing billions of

or somebody who's never invested a penny, I get exactly the same question. And it is, Liz, why is X, Y, and Z in the top 10 of this fund? Like, do these guys care at all? And so if that's your first answer, just close that fund or strategy and go on to the next one. You're right. Probably if you really want real ESG, you're going to run into a lot of stuff that's

half-baked in trust your gut reaction. It's correct. I promise you whether you're running a $50 billion pension or you have $5, your gut instinct is correct on this.

I love it. Well, Liz, thanks so much for coming on, for giving your time, for sharing your knowledge. I really, really appreciate it. When you make your way to the US, we might just have to have you back on the show to talk more about how people can get access to you. But for now, I really appreciate you educating us and dealing with my questions here and helping me on this learning adventure of mine. So thank you very much. Thank you for having me.

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