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Trillium News
March 12, 2025

Facing political whiplash, here’s why investors should stay the course

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While small-cap stocks were hard hit during the first half of 2022, August’s earnings season revealed a bounce back for the asset class. What does this mean for Trillium’s ESG Small/Mid Cap Core Portfolio?

Facing political whiplash, here’s why investors should stay the courseFacing political whiplash, here’s why investors should stay the course

Dear U.S. Environmental Protection Agency Administrator and Members of Congress,

As the world navigates a changing political and economic environment, we wanted to respond to the current moment by addressing the potential impacts on your investment portfolio.

As the world navigates a changing political and economic environment, we wanted to respond to the current moment by addressing the potential impacts on your investment portfolio.

Matthew Patsky, CFA
CEO and Portfolio Manager

For long-term investors, we firmly believe the best course of action continues to be investing in a well-diversified portfolio. And as values-driven investors, we are adamant that now, perhaps more than ever, it is crucial to leverage all available tools for actively engaging public companies and encouraging their leaders to remain focused on building toward a sustainable future.

Understandably, many investors are feeling overwhelmed by the current news cycle. The administration has moved quickly to carry out a “flood the zone” strategy1 , designed to keep those who challenge their executive actions consistently off-balance, distracted, and lacking direction. This approach has made it increasingly difficult to separate the static from the noise, to fully grasp the economic, social, and environmental impacts of their policy priorities.

So far, reactions from global markets have been more muted than headlines suggest. Overall, US equity markets have returned the post-election gains of December, with the S&P 500 hovering near the levels seen prior to the election. International markets are positive year-to-date, recovering from the post-election sell-off. Investors are balancing policy impacts, such as tariffs, that could put downward pressure on economic growth and potentially spark near-term inflation against other potentially expansionary policies that have been enacted or proposed, including corporate tax cut extensions and deregulation.

The investor response likely reflects the uncertainty experienced during the first Trump administration and has continued in the early days of the second; Trump does not hold strong ideological conviction when it comes to the policies he proposes and will quickly adjust course if he views a new direction as beneficial. This level of unease makes assessing investment risks incredibly challenging and supports staying the course.

While we unequivocally believe that, unchecked, this administration’s policies and actions will have significant negative impacts on our democracy, the economy, people, and planet, we must remain clear-eyed in our approach to navigating this near-term uncertainty. As investors and stewards of client assets, our investment recommendations must be grounded in the most accurate information available, including the historical performance of markets through periods of political or economic volatility.

Within our equity strategies, we are focusing on high quality businesses with leading market positions, solid balance sheets, and strong environmental, social, and governance characteristics. We are assessing the potential impacts of policy and regulatory changes at the industry and company level. While we are not shifting away from our values and focus on sustainable business models, we are managing our exposures in light of the current environment. For example, we are emphasizing broader themes and directionality, rather than specific policies, given Republican priorities and their control of the executive branch and narrow legislative majority.

At Trillium, we remain committed to advocating for policies and practices that support a more just and sustainable economy for the long term. Despite political pressures to the contrary, we uphold our conviction that companies that build diverse teams and equitable and inclusive workplaces will be best positioned to attract the talent needed to innovate and be responsive to customer needs. We also believe companies that build strategies for a low-carbon world and manage climate-related risks are best positioned to deliver strong returns to long-term investors.

In the United States, every business is afforded a vast number of benefits that come from operating within a liberal democracy with strong civic institutions. Business leaders should actively undertake efforts to support those institutions and counter efforts to erode our democracy. We will use our voice as investors to reinforce this longview of shareholder value creation.

As always, our focus remains on helping you and your clients achieve their long-term financial goals. We are closely monitoring political and economic developments and will continue to adjust our strategies as needed to navigate this evolving landscape. If you have any questions please don’t hesitate to reach out to your sales representative.  

‍

Warm Regards,

Matt Patsky

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1 Trump’s ‘Flood the Zone’ Strategy Leave Opponents Gasping in Outrage - The New York Times

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About Trillium Asset Management

Trillium Asset Management offers investment strategies and services that advance humankind towards a global sustainable economy, a just society, and a better world. For over 40 years, the firm has been at the forefront of ESG thought leadership and draws from decades of experience focused exclusively on responsible investing. Trillium uses a holistic, fully integrated fundamental investment process to uncover compelling long-term investment opportunities. Devoted to aligning stakeholders’ values and objectives, Trillium combines impactful investment solutions with active ownership. The firm delivers equity, fixed income, and alternative investments to institutions, intermediaries, high net worth individuals, and other charitable and non-profit organizations with the goal to provide positive impact, long-term value, and ‘social dividendsTM ’.

Important Information: The views and opinions above are as of March 2025 and are subject to change. There is no assurance that impact or investment objectives will be achieved. This is not a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. The specific securities were selected on an objective basis and do not represent all of the securities held purchased, sold or recommended for advisory clients.

‍

‍

‍

As the world navigates a changing political and economic environment, we wanted to respond to the current moment by addressing the potential impacts on your investment portfolio.

Matthew Patsky, CFA
CEO and Portfolio Manager

For long-term investors, we firmly believe the best course of action continues to be investing in a well-diversified portfolio. And as values-driven investors, we are adamant that now, perhaps more than ever, it is crucial to leverage all available tools for actively engaging public companies and encouraging their leaders to remain focused on building toward a sustainable future.

Understandably, many investors are feeling overwhelmed by the current news cycle. The administration has moved quickly to carry out a “flood the zone” strategy1 , designed to keep those who challenge their executive actions consistently off-balance, distracted, and lacking direction. This approach has made it increasingly difficult to separate the static from the noise, to fully grasp the economic, social, and environmental impacts of their policy priorities.

So far, reactions from global markets have been more muted than headlines suggest. Overall, US equity markets have returned the post-election gains of December, with the S&P 500 hovering near the levels seen prior to the election. International markets are positive year-to-date, recovering from the post-election sell-off. Investors are balancing policy impacts, such as tariffs, that could put downward pressure on economic growth and potentially spark near-term inflation against other potentially expansionary policies that have been enacted or proposed, including corporate tax cut extensions and deregulation.

The investor response likely reflects the uncertainty experienced during the first Trump administration and has continued in the early days of the second; Trump does not hold strong ideological conviction when it comes to the policies he proposes and will quickly adjust course if he views a new direction as beneficial. This level of unease makes assessing investment risks incredibly challenging and supports staying the course.

While we unequivocally believe that, unchecked, this administration’s policies and actions will have significant negative impacts on our democracy, the economy, people, and planet, we must remain clear-eyed in our approach to navigating this near-term uncertainty. As investors and stewards of client assets, our investment recommendations must be grounded in the most accurate information available, including the historical performance of markets through periods of political or economic volatility.

Within our equity strategies, we are focusing on high quality businesses with leading market positions, solid balance sheets, and strong environmental, social, and governance characteristics. We are assessing the potential impacts of policy and regulatory changes at the industry and company level. While we are not shifting away from our values and focus on sustainable business models, we are managing our exposures in light of the current environment. For example, we are emphasizing broader themes and directionality, rather than specific policies, given Republican priorities and their control of the executive branch and narrow legislative majority.

At Trillium, we remain committed to advocating for policies and practices that support a more just and sustainable economy for the long term. Despite political pressures to the contrary, we uphold our conviction that companies that build diverse teams and equitable and inclusive workplaces will be best positioned to attract the talent needed to innovate and be responsive to customer needs. We also believe companies that build strategies for a low-carbon world and manage climate-related risks are best positioned to deliver strong returns to long-term investors.

In the United States, every business is afforded a vast number of benefits that come from operating within a liberal democracy with strong civic institutions. Business leaders should actively undertake efforts to support those institutions and counter efforts to erode our democracy. We will use our voice as investors to reinforce this longview of shareholder value creation.

As always, our focus remains on helping you and your clients achieve their long-term financial goals. We are closely monitoring political and economic developments and will continue to adjust our strategies as needed to navigate this evolving landscape. If you have any questions please don’t hesitate to reach out to your sales representative.  

‍

Warm Regards,

Matt Patsky

‍

1 Trump’s ‘Flood the Zone’ Strategy Leave Opponents Gasping in Outrage - The New York Times

‍

‍

‍

About Trillium Asset Management

Trillium Asset Management offers investment strategies and services that advance humankind towards a global sustainable economy, a just society, and a better world. For over 40 years, the firm has been at the forefront of ESG thought leadership and draws from decades of experience focused exclusively on responsible investing. Trillium uses a holistic, fully integrated fundamental investment process to uncover compelling long-term investment opportunities. Devoted to aligning stakeholders’ values and objectives, Trillium combines impactful investment solutions with active ownership. The firm delivers equity, fixed income, and alternative investments to institutions, intermediaries, high net worth individuals, and other charitable and non-profit organizations with the goal to provide positive impact, long-term value, and ‘social dividendsTM ’.

Important Information: The views and opinions above are as of March 2025 and are subject to change. There is no assurance that impact or investment objectives will be achieved. This is not a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. The specific securities were selected on an objective basis and do not represent all of the securities held purchased, sold or recommended for advisory clients.

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‍

‍

Read more (PDF)

As the world navigates a changing political and economic environment, we wanted to respond to the current moment by addressing the potential impacts on your investment portfolio.

Matthew Patsky, CFA
CEO and Portfolio Manager

For long-term investors, we firmly believe the best course of action continues to be investing in a well-diversified portfolio. And as values-driven investors, we are adamant that now, perhaps more than ever, it is crucial to leverage all available tools for actively engaging public companies and encouraging their leaders to remain focused on building toward a sustainable future.

Understandably, many investors are feeling overwhelmed by the current news cycle. The administration has moved quickly to carry out a “flood the zone” strategy1 , designed to keep those who challenge their executive actions consistently off-balance, distracted, and lacking direction. This approach has made it increasingly difficult to separate the static from the noise, to fully grasp the economic, social, and environmental impacts of their policy priorities.

So far, reactions from global markets have been more muted than headlines suggest. Overall, US equity markets have returned the post-election gains of December, with the S&P 500 hovering near the levels seen prior to the election. International markets are positive year-to-date, recovering from the post-election sell-off. Investors are balancing policy impacts, such as tariffs, that could put downward pressure on economic growth and potentially spark near-term inflation against other potentially expansionary policies that have been enacted or proposed, including corporate tax cut extensions and deregulation.

The investor response likely reflects the uncertainty experienced during the first Trump administration and has continued in the early days of the second; Trump does not hold strong ideological conviction when it comes to the policies he proposes and will quickly adjust course if he views a new direction as beneficial. This level of unease makes assessing investment risks incredibly challenging and supports staying the course.

While we unequivocally believe that, unchecked, this administration’s policies and actions will have significant negative impacts on our democracy, the economy, people, and planet, we must remain clear-eyed in our approach to navigating this near-term uncertainty. As investors and stewards of client assets, our investment recommendations must be grounded in the most accurate information available, including the historical performance of markets through periods of political or economic volatility.

Within our equity strategies, we are focusing on high quality businesses with leading market positions, solid balance sheets, and strong environmental, social, and governance characteristics. We are assessing the potential impacts of policy and regulatory changes at the industry and company level. While we are not shifting away from our values and focus on sustainable business models, we are managing our exposures in light of the current environment. For example, we are emphasizing broader themes and directionality, rather than specific policies, given Republican priorities and their control of the executive branch and narrow legislative majority.

At Trillium, we remain committed to advocating for policies and practices that support a more just and sustainable economy for the long term. Despite political pressures to the contrary, we uphold our conviction that companies that build diverse teams and equitable and inclusive workplaces will be best positioned to attract the talent needed to innovate and be responsive to customer needs. We also believe companies that build strategies for a low-carbon world and manage climate-related risks are best positioned to deliver strong returns to long-term investors.

In the United States, every business is afforded a vast number of benefits that come from operating within a liberal democracy with strong civic institutions. Business leaders should actively undertake efforts to support those institutions and counter efforts to erode our democracy. We will use our voice as investors to reinforce this longview of shareholder value creation.

As always, our focus remains on helping you and your clients achieve their long-term financial goals. We are closely monitoring political and economic developments and will continue to adjust our strategies as needed to navigate this evolving landscape. If you have any questions please don’t hesitate to reach out to your sales representative.  

‍

Warm Regards,

Matt Patsky

‍

1 Trump’s ‘Flood the Zone’ Strategy Leave Opponents Gasping in Outrage - The New York Times

‍

‍

‍

About Trillium Asset Management

Trillium Asset Management offers investment strategies and services that advance humankind towards a global sustainable economy, a just society, and a better world. For over 40 years, the firm has been at the forefront of ESG thought leadership and draws from decades of experience focused exclusively on responsible investing. Trillium uses a holistic, fully integrated fundamental investment process to uncover compelling long-term investment opportunities. Devoted to aligning stakeholders’ values and objectives, Trillium combines impactful investment solutions with active ownership. The firm delivers equity, fixed income, and alternative investments to institutions, intermediaries, high net worth individuals, and other charitable and non-profit organizations with the goal to provide positive impact, long-term value, and ‘social dividendsTM ’.

Important Information: The views and opinions above are as of March 2025 and are subject to change. There is no assurance that impact or investment objectives will be achieved. This is not a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. The specific securities were selected on an objective basis and do not represent all of the securities held purchased, sold or recommended for advisory clients.

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Trillium's Approach to Investing in Energy and Power
‍No genuine effort to slow or combat climate change can ignore Energy and Power. Trillium seeks to find the companies best-positioned to lead―and benefit from―the ongoing energy transition. Learn more about our approach to investing in Energy and Power.
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‍Advocacy Impact Report - Second Half 2021
‍Trillium considers it fundamental to our mission and our fiduciary responsibility to engage with the companies that we hold in our portfolios to press for positive change that we believe will help improve ESG policies, performance, or impact. Learn more about our recent engagement activities.
Facing political whiplash, here’s why investors should stay the course
submit your nominationtrillium's statement re: russian invasion of ukraine (PDF)View Matt’s Interviewread full paper (pdf)

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