Sarah Riopelle is a senior portfolio manager at RBC Global Management and oversees a $107 billion portfolio. She’s effectively responsible for the asset-management division at the Royal Bank of Canada, which is the fifth-largest lender in North America. In an interview with Bloomberg this week, Riopelle discussed her sentiment on the markets in 2020. She also provided a forecast of expected returns and chatted about ESG criteria.

Sarah Riopelle on Markets for 2020 in Bloomberg

“Given the strong performance that we’ve seen in markets over the last couple [of] years, especially in 2019, we’re cautioning people to lower their total return expectations. We’re not going to get a repeat this year of the returns that we saw in 2019,” Riopelle said.

RBC Manager on ESG

“Climate is a particular focus for people now. They seem to realize that global warming is a thing. I think that doesn’t go away. It’s going to continue to gain traction and be topical for people, and I think we’re very well positioned in that way: We incorporate ESG into the investment process, and we really think about active stewardship. With all of the companies our portfolio managers invest in, they meet with management teams and boards and talk to them about ESG factors and what our concerns are and help them to work through some of those issues,” she said.

Riopelle on ESG Criteria

“Ultimately, our clients hire us to manage our assets relative to a market or an index. We have to be very careful about screening out sectors and stocks based on some of these criteria because our clients didn’t ask us to do that. If our clients wanted us to do that, they could invest in one of the responsible investment or Vision suite of funds that we have,” she said.

That said, we do have a few “no-go zones”: Land mines is one of them, a couple [of] things related to ammunition and guns, but that’s sort of all that we’ve done. I realize that tobacco can be an issue for some people and thermal coal. But it’s a slippery slope if you get to the point of starting to screen that stuff out. Because where do you draw the line, and where do you stop?”

To read the full interview, go here.

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