The New Fundamentals of Investing

Developed in 2004, HIP Investor’s unique methodology rates and ranks all types of investments for future risk, return potential and net impact on on society.  HIP’s quantitative analysis of fundamentals systematically identifies the drivers of 84% of market value not on the balance sheet.  HIP Ratings are a useful tool for investors to fund human, social and environmental solutions — while pursuing optimal risk-adjusted returns.


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Indicators of Impact, Future Risk,
and Potential Future Returns

HIP Impact Ratings score and rank investments on a 0 to 100 spectrum that captures metrics from operational outcomes, products and services, and management practices


HIP Ratings Universe + Methodology

HIP Investor rates and ranks more than 32,000+ investments globally across all asset classes:
  • 5,770+ equities of companies worldwide;
  • 26,700+ bond issuances, including municipals, sovereigns/TIPS and agencies.
  • 100+ REITs: real-estate investment trusts as well as Private Equity + Venture Capital
  • 1000s of mutual funds and ETFs.
With HIP Ratings, investors can measure the current sustainability — whether innovative or extractive — of each security, strategy and fund in their portfolio.
A HIP Rating is a zero-to-100 score quantifying:
  • Net +/- Impact across 5 thematic Pillars: Health, Wealth, Earth, Equality, and Trust,
  • Mitigators of Future Risk,
  • Drivers of Return potential.

Anatomy of a HIP Rating

HIP Impact Rating = Operational Outcomes + Products and Services + Management Practices


Each of these three dimensions is analyzed using HIP’s Proprietary ‘5 Impact Pillars’ System, which is customized for each investment vehicle type

Health

Wealth

Earth

Equality

Trust



HIP Investor’s Ratings Are Used By

Investors pursuing an Impact focus, apply HIP Ratings to select and weight investments in stocks, bonds and funds/ETFs, to pursue optimal risk-adjusted returns.

 

Advisors who understand that Impact links to future risk and return potential, and want to serve investors using their portfolio to fund impact & solutions.

 

Fund Managers seeking an edge with HIP Ratings, which can reveal knowable-yet-ignored risks and potential sources of untapped returns.

 

401(k) Plans for companies seeking higher employee engagement, HIP Ratings of fund choices can yield higher participation and contribution rates.

 


How HIP Works

HIP Ratings for 401(k) Plan Sponsors

401k model


 

HIP Ratings for Advisors and Individual Investors

HIP Ratings for individuals


 

HIP Strategies for Advisors and Individual Investors

HIP Strategies for individuals


 

HIP Ratings for Fund Managers

HIP ratings for managers


HIP Ratings Examples


Equities and Corporate Bonds

 

TOP PERFORMER

Company Rating Analysis Summary
Autodesk 73.3 Autodesk is an overall strong performer and is very transparent in its reporting. Highlights include profit sharing through stock options which average over $20,000 per employee, reporting low CO2 emissions relative to revenues, and spending $0 on lobbying activities. These are HIP practices that indicate well-managed stakeholder relations and efficient operations.

 

LAGGARD

Company Rating Analysis Summary
Halliburton 37.0 Halliburton does not report the proportion of women employees and managers, nor its litigation and lobbying expenses. The company lacks quantifiable metrics for waste production, recycling, and water usage, while it reports relatively high CO2 emissions in relation to revenue. The lack of quantifiable metrics and transparency restrict investors’ ability to evaluate management quality and to predict future risk and performance.

USA Municipal Bonds

K-12

Issuer Rating Analysis
Twin Falls, ID School District No. 140 64.9 This relatively small school district of 7,000 students receives an above-median score with graduation rates at 94% despite a low per-pupil investment and over-reliance on state funding at 66% of total revenue. This indicates sound, results-oriented fiscal management by the district.

 

Issuer Rating Analysis
Chicago, IL Board of Education 74.4 Oversees third largest school district with over 400,000 students and nearly 700 schools. Relatively low pupil-teacher ratio (17.9) and significant local investment (44% of total revenue) contributes to the near-median rating. Board could improve on diversity to increase overall rating.

HEALTHCARE

Issuer Rating Analysis
Washington Healthcare Facilities (Peacehealth) 71.8 Healthcare system with three facilities serving patients in the state of Washington. Two out of three facilities did not report admissions data, which lowers its overall rating. However, the system ranks 20 points above the median rating with one nationally recognized physician and excellent customer satisfaction scores, which earned it 100% of total points in that category.

 

Issuer Rating Analysis
Stanford Hospital and Clinics 88.0 Stanford Hospital and Clinics enjoys #1 HIP-rated status at 34.8 points above the median. This huge healthcare issuer with nearly 800 beds delivers high customer satisfaction scores and lower rates of patient mortality. It also receives merits at the national, state and local levels. In addition, Stanford employs 93 of the nation’s top 1% of doctors.

 

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