Join us in this enlightening podcast episode, as host Darin Tuttle delves into a conversation with Justin Bernier, CIO of National Security Index.
They explore the ethical complexities of investing in emerging markets, focusing on avoiding bad actors and human rights violators.
Bernier introduces the concept of National Security Governance in investments, an alternative to traditional ESG approaches. The discussion also covers the unique intelligence-based screening process of the National Security Index ETF, the role of China in global markets, and the potential expansion of this investment approach to other markets and the bond market. This episode is a must-listen for investors interested in ethical investment strategies and national security insights.
Summary of Key Topics Discussed:
* Justin Bernier's Background: The conversation starts with an introduction to Justin Bernier, Chief Investment Officer of the National Security Index, highlighting his extensive experience in finance and national security.
* National Security Emerging Markets Index ETF: Bernier discusses the rationale behind the creation of this ETF, emphasizing the need for ethical investment in emerging markets, avoiding companies that are bad actors or violate human rights.
* Investment Challenges and Wall Street's Stance: Bernier points out the reluctance of major asset managers to address the issue of investing in companies that are either security threats or human rights violators, citing a lack of legal restrictions as their justification.
* Investment in China and Risk Management: The conversation delves into the complexities of investing in China, including the legality of investing in sanctioned companies and the need for a responsible approach to investing in Chinese companies.
* National Security Governance as Part of ESG: Bernier introduces the concept of National Security Governance as an alternative or supplement to ESG (Environmental, Social, Governance), focusing on avoiding investment in entities that compromise U.S. national security and human rights.
* Intelligence-Based Screening Process: The unique approach of the National Security Index ETF in using an intelligence-based screening process for investments is discussed, differentiating it from traditional ESG funds.
* Globalization of National Security in Investments: The conversation touches on the global nature of national security concerns in investments, including the need to look beyond China and consider other international threats.
* Potential Expansion to Other Markets and Bond Market Considerations: Bernier discusses the possibility of applying their screening approach to other markets and the bond market, highlighting the interconnectedness of global finance and national security.
* China's Capital Market Dynamics: The discussion covers the structure of China's capital markets and the role of the Chinese government in them, contrasting this with the U.S. system.
* Call to Action and Availability of Information: Bernier concludes by inviting listeners to learn more about their approach and the ETF through their website, emphasizing the importance of informed investing decisions.
Best,
Darin Tuttle, CFA
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