ICE Is In Your Portfolio: The Truth About Getting Rich Under Capitalism
Listen and Follow Heir Necessities: Apple Podcasts | Spotify | YouTube
What does sustainable investing look like when you're still making money under capitalism?
In this episode, I sit down with Daniel McNabb, head of the Investment Team at Chicory Wealth, to dive into the uncomfortable reality of investing for good in public markets.
We’re pulling back the curtain on how ESG and Impact Investing can help make our world better, even if they’re not a perfect solution.
And while we don't directly address ICE in the episode, it's the topic hanging over both of our heads.
Do you want to own companies that directly support the atrocities of the current administration's immigration crackdown?
Plus, we cover how the Chicory portfolios at Sunnybranch work, the inevitable trade-offs of the stock market, and why voting proxies really matters.
We also get a little spicy with our 2026 stock market predictions.
Spoiler alert: we have different takes.
If you want to know a little about the stock market and a lot about how to do better with your money, this is the episode for you.
🗓️ Schedule a FREE call to talk more about how I can help you navigate a current or future inheritance.
Transcript:
Katherine Fox (00:00)
Hello and welcome to Heir Necessities, the podcast that turns complex financial topics into real talk for Gen X, millennial and Gen Z inheritors. Each episode of this podcast, I break down a different topic related to generational wealth and inheritance. My goal is you can stop asking Google or ChatGPT what to do with your money and come here instead for real talk, real solutions and real guidance that you can start implementing in your life today.
On this episode of Heir Necessities, we are diving into everything that happened in the financial markets in 2025 and what might be coming in 2026. I'm super excited about this podcast. I have a special guest joining me today.
Before we dive into it, if you are enjoying Heir Necessities, you like the pod and have two seconds to leave us a five-star review, Apple Podcasts, Spotify, wherever you listen to the podcast, it's hugely helpful for the show. And more importantly, it helps me connect with other inheritors.
With that out of the way, I am super excited to introduce today's guest on the podcast, Daniel McNabb. Daniel leads the investment team at Chicory Wealth. He's a certified financial planner who took over that role in 2020.
And since then, he's been focused on increasing sustainability within the portfolios at Chicory Wealth. Daniel, hello and welcome to Heir Necessities.
Daniel McNabb (01:25)
Thanks for having me, Katherine. Glad to be here.
How Sunnybranch Wealth Partners with Chicory for ESG Portfolios
Katherine Fox (01:27)
Super excited to dive into our conversation today. Before we do, I've got some spicy, some not so spicy questions for you. But I just want to take a second to intro how we know each other and what role the Chicory portfolios play at Sunnybranch.
I have two different options for client portfolios. Both of those options have an ESG, environmental social governance, or impact focus. The first option is a portfolio of ESG ETFs that broadly track the indexes that they're linked to.
This portfolio is going to cost less, but it's also going to have a lower impact alignment, just because you own so many more positions. Great for clients who are really concerned about fees and who are less concerned about the overall impact in their portfolio. For clients who really want a more focused impact option, I have partnered with Chicory Wealth to offer their core and their sustainable opportunities portfolios.
Daniel's going to talk a little bit more about what those portfolios are. So I'm not going to steal his thunder here, but these are the best option for clients at Sunnybranch who want a more focused dive into impact. Not in a portfolio that's intended to have a concessionary return, but really in a portfolio that puts values first with a focus on sustainability.
So with that all in mind, Daniel, I'd love to turn it over to you to tell our audience a little bit more about the Chicory portfolios and how they're built.
Understanding Chicory's Sustainable Investment Strategy
Daniel McNabb (03:04)
Sure, so at Chicory, we are very focused on knowing what we own. So these portfolios are constructed with individual stock positions. And typically we have between 30 and 50 positions in the strategy at any given time.
We start by screening the stock universe, excluding fossil fuel extractors, private prisons, tobacco, weapons and alcohol companies. And with the resulting list of companies, we look for quality companies that have very strong business fundamentals, so they're growing their sales. They're growing their profits and they are doing so importantly in a way that is contributing to sustainable development on the planet.
So they might be doing something with increasing access to clean water or access to healthcare. They spend a lot of their money on research and development as opposed to just, you know, paying out large dividends. They're actively growing and innovating.
So that's a real focus of the strategy. So there are two strategies. The first one, the core strategy, is designed to kind of mimic the index a bit more in terms of how it rises and falls with that index.
Core vs. Sustainable Opportunities: Choosing the Right Portfolio
Daniel McNabb (continued)
And the sustainable opportunities model is less tethered to that index. And so there are larger concentrations of positions in certain parts of the economy. So more renewable energy, for example.
And so that portfolio is a little bit more volatile, but it does have an even greater sustainability framework.
The Reality of Trade-Offs in Values-Aligned Investing
Katherine Fox (04:49)
One of the questions that I get really often from my clients, something that I talk with people about a lot, is this sort of central tension that exists when you're trying to make money under capitalism. And if you're investing in public markets, there are going to be trade-offs, always. Can you talk to me a little bit about, in the core portfolio, that portfolio that's going to track its benchmark a little bit more closely than the sustainable opportunities portfolio, how you all think about those trade-offs when, yes, there's a sustainability focus and you're looking for companies that are forward-looking and focused on sustainability in one area or another.
And these are also huge companies, in some cases in the US, globally. By virtue of being companies of this size, while they may have a focus on sustainability in certain areas, they're also probably doing some things that people agree with less or that we would consider to be less values aligned. Can you talk a little bit about how you think about those trade-offs when you're investing in public markets?
How Chicory Evaluates Material Risk in Technology Companies
Daniel McNabb (06:02)
Sure, so one of the things we look at is kind of the materiality of a particular risk. So for example, when we're looking at a company like in the technology sector, for example, we would look at how that company's technology is used. There are certain kind of red lines that if crossed might preclude investment in that company.
So we have some very large technology companies now that sell cloud computing services to governments around the world. And some of those governments are engaged in activities that most people would find morally reprehensible. And so, you know, the question is, okay, what are the risks to this company of those actions from some of its customers?
What is the company doing to perhaps limit use of its products by those customers? And how much revenue, how much profits are derived from those activities? So we kind of hone in on what exactly is happening, where the money is flowing, and really want to understand how a company's management is viewing that risk.
We're also able to vote proxies on those issues as they arise. And in some cases, we actually engaged with the company itself. We do believe that it's possible to do less harm in the public markets.
It's not possible to do no harm. As you said, there are no solutions. There are only trade-offs.
Distinguishing Between Core Business Strategy and Problematic Revenue Streams
Daniel McNabb (continued)
And so when assessing a company, we really try to differentiate between companies where kind of their core business strategy is dependent on something that we find morally wrong and companies that might just have a small slice of their business that is in that category. And so that's kind of one of the main struggles that we do have. And it's becoming increasingly difficult as companies get larger and larger and companies are increasingly engaged in acquisitions and mergers.
You have to look under the hood again to really see what it is you're owning and how those companies are making a profit and how they're impacting the world.
Why Proxy Voting Matters for Impact Investors
Katherine Fox (08:24)
Because you mentioned proxies, this is another thing that a lot of people don't think about when they think about bringing impact into their portfolio and public markets and the trade-offs there, the importance of voting proxies. So can you just share a little bit about how Chicory votes proxies, what the strategy is there for these funds?
Understanding Shareholder Resolutions and Corporate Change
Daniel McNabb (08:47)
Sure, the proxy process happens usually once a year. There's a general meeting for a company where they will nominate certain board of director members. They'll look at the compensation for the CEO.
They'll look at the auditor. And then sometimes they will have shareholder resolutions. This shareholder resolution piece of this is really an important one.
So a shareholder resolution can be brought to a company that asks the company to address a certain risk or to take a certain action. Importantly, those shareholder resolutions are non-binding. But research has shown that it really does galvanize the management of a company to make a change.
Chicory's Proxy Voting Partners and Process
Daniel McNabb (continued)
So our proxy process, we have a variety of partners. As You Sow, we're members of ICCR, the Interfaith Center for Corporate Responsibility, and CIF. These organizations all kind of share information regarding material proxy votes that are coming up.
We look at that resolution. We make a determination of whether that should be a yes or a no from our perspective and then we vote that way. A lot that goes into it.
But we also sometimes, some of our clients also sponsor shareholder resolutions. We always make sure, of course, to vote for those when those come up.
Katherine Fox (10:16)
Thank you for explaining. Certainly an important part of ESG and impact investing and also probably one of the least understood or the pieces that most people who are in these portfolios don't even know anything about.
2025 Market Review: AI Dominance and Economic Trends
Katherine Fox (continued)
I want to move away from the general portfolio discussion and talk about both what you saw happen in 2025 and how you responded in the Chicory portfolios. And then tell me a little bit more about what trends you're seeing as we move into 2026 and what you're watching really closely in these portfolios.
The Artificial Intelligence Boom and NVIDIA's Market Leadership
Daniel McNabb (10:44)
2025 was a very interesting year. The major story there was really artificial intelligence and how that is becoming a more prevalent part of most companies' operations. And we're still in the early days there, but we saw a ton of investment flowing through into AI.
And of course, the kind of poster child of that was NVIDIA as they manufactured the chips that are used there. So we saw markets were up strongly. And this was also in a kind of an uncertain US policy environment and an uncertain geopolitical environment.
Tariff Volatility and the "Sell America" Trade
Daniel McNabb (continued)
Obviously, the new administration really had a couple of volatile moments in, for example, in April with the tariff announcements. Where, you know, people began to lose faith in the US really as an investment. So that the kind of sell America trade was very prominent following those tariff announcements.
But then we saw a rebound, pretty significant rebound. And so we've seen company earnings have been strong and a lot of the growth in the stock market last year was attributable to just companies making more money, not just things becoming more expensive, you know, in terms of stock prices just going up. It was actually the companies are making more money.
So a lot of that was based in fundamentals. AI definitely still, you know, coming into 2026, that's a major theme, I think that will continue. We're still in the early days.
Investing in AI Infrastructure: A Strategic Approach
Daniel McNabb (continued)
Adoption of AI tools has increased pretty significantly, but still has a long way to go. The companies that are making the models, so like Claude, ChatGPT, these models, it's still a race to see who's going to be the ultimate kind of winner there. And so where we have sat in terms of how to invest in this market is trying to invest in the players that are more kind of that base infrastructure layer of AI that will benefit kind of regardless of which model provider prevails.
So that's really been our approach. And those companies have seen their sales increasing significantly and their profits also. So that's something we'll be looking at.
Another kind of theme for 2026.
Consumer Spending and GDP: What to Watch in 2026
Daniel McNabb (continued)
Really, we're going to be looking at what the economy is doing. We got some good data this morning. Payrolls were solid.
GDP growth in the fourth quarter was over 4%, which is very good. And we're going to be really focused on consumer spending. That's been kind of the main force propping up GDP is people spending money.
The Wealth Gap: Top 20% vs. Bottom 80% of Earners
Daniel McNabb (continued)
Of course, a lot of that has been the top 20% of earners spending money. And we've kind of had this bifurcation where lower earners are really feeling pinched a lot more and upper income earners have seen their wealth really balloon as the stock market has had three years now in a row of really solid returns. So that's really a major focus for us as well as what the economy is doing in the US.
Can Wealth Inequality Continue?
Katherine Fox (14:11)
It's so interesting to watch, especially obviously at Sunnybranch. I work primarily with younger inheritors, the top, you know, one percent of the one percent kind of by age level. And it's something that I think about a lot is as the stock market continues to increase, right?
Like what are we creating and what are we contributing to and if the stock market keeps going up and you have this top 20% of the population who's doing really well and just keeps having more and more money but you have this other, you know, the bottom 80% who isn't sharing in that wealth, how long is that sustainable for and can, is that something that can keep going on forever, in which case, what does the country look like? What does that mean then if you are in that top 20%? What does your responsibility become, either in terms of working within the system, agitating against the system?
It's a little bit outside the scope of our conversation today, but I think it is such a, it's just such an interesting time that we are living in, not always for the better, right? But just thinking about the lived experience of wealth during the past few years, and is that going to continue in this way, or is it going to start to change. And I think that's a great segue into the last question I want to ask you.
2026 Stock Market Predictions: Expert Forecasts
Katherine Fox (continued)
I'm going to answer this question as well, but I want to hear your, Daniel's personal prediction for what's going to happen in the markets in 2026. I'm going to give mine and then we can revisit this conversation in a year in January of 2027. We're going to come back.
We're going to see what you said would happen. We're going to see what I said would happen and then we'll think about what really happened and how no one can predict the future. But yeah, I would love to know what's on your bingo card for the stock market in 2026.
Daniel's Conservative Outlook: 0-5% Returns for 2026
Daniel McNabb (16:11)
Absolutely. Yeah, we might come back in a year and both look very foolish, but it's worth looking at. We could at that.
So when I think about how the stock market might perform in 2026, I'm looking at, you know, where it sits right now, which is a pretty, the US stock market, it looks pretty expensive right now still. I mean we're trading well over 22 times earnings. And so it seems like there might not be too much further for it to expand.
However, a lot of it will depend on company earnings. And so I think that, you know, when I kind of assign probabilities to various scenarios, in my mind, the highest probability that I see is that we kind of meander along. You know, probably less than 5% return for the year, but you know, barring any sort of significant degradation in the US labor market or, you know, geopolitical conflict or trade war, we won't see a very large drawdown.
But again, that's a big if, right? So we saw with the Greenland rhetoric how it seemed like there could be some really large implications for a trade war with Europe, which would, of course, I think, dramatically reduce stock returns. So, yeah, we'll just say 0 to 5% return for 2026 is my prediction.
Katherine's Bull Case: 7-9% Returns Until Midterms
Katherine Fox (17:48)
Okay, I'm going to take the over on that because there's what conservative me thinks will happen, right? Which is like, always be prepared. Like, it feels unsustainable if you look again at this top 20% and this bottom 80%.
It feels like at some point the stock market needs to reflect the reality for the majority of people in this country. And also what I think more is that Trump will say whatever he needs and kind of do whatever he needs to keep the markets moving forward. And I think that they are up more than forward.
And I think that he is supported in that by the possibilities of the AI boom and what that means for increased corporate profits, even while those are possibly like making life worse for again, that 80% of people. I think that's something that we just saw, right? Again, with this Greenland rhetoric, like, we're going to war with Europe.
Stock market's down 2%. We're not going to war with Europe, right? And so my prediction, hot take, is that we continue to see the markets, I'm going to take above 5%, I'm not saying like 20%, but let's say, gosh, 7 to 9%, okay?
Political Shifts and Market Volatility: A Midterm Prediction
Katherine Fox (continued)
That's my range, until we get to the midterms, right? And then I'm predicting, I'm knocking on wood here, all the wood, right? Blue wave.
Now, Republicans aren't fully in control and Trump can say a little bit more. He can like be a little bit more unhinged is incorrect because that is not a possibility. But he has like a scapegoat now who has power.
And so I think we continue on until November, knock on wood, there's a blue wave. And then because of the blue wave, we see a deterioration in market conditions. So I'm going to say we're up 7 to 9% on the year through November, knock on wood, Democrats control the House and Senate, and then we see a market drop off at that bit of a sell off, not a huge one, but maybe like a 10 to 15% sell off.
So I've gotten very specific with this and no, I'm not going to be right, but maybe I will be. Then I'll look really smart when we chat next year.
Consumer Confidence vs. Market Performance: A Historical Anomaly
Daniel McNabb (20:08)
It's always possible, yeah, always possible. We're both being fairly conservative with it. It's interesting because consumer confidence has been so low even as the stock market has done well, which is normally consumer confidence is like lowest right before a big boom, but it's been low throughout this boom.
So it's, you know, some of the like, the old wisdom is not necessarily applying here. So anyone's game. We'll see how it goes.
Navigating the New Era of Market Uncertainty
Katherine Fox (20:36)
Yeah, it does feel like we're in a little bit of a different era. Like we're still all figuring out what that means, right? It hasn't been fun so far, you know, three weeks into 2026.
Wrapping Up: Connect with Sunnybranch Wealth
Katherine Fox (continued)
And on that super happy note, I think we're about time to wrap it up. Daniel, I want to thank you again so much for joining me. This has been fun to chat and I'm hoping you'll be willing to come back on Heir Necessities again before January of 2027 to talk a little bit more about what we're seeing, maybe kind of a mid-year update in the markets and on the Chicory Portfolios.
If you have enjoyed this episode, if you have any questions for me or for Daniel, you can reach out to me, katherine@sunnybranchwealth.com. Follow me on Instagram at @sunnybranchwealth. Daniel, thank you again for joining me and I'll look forward to chatting again on a future episode of Heir Necessities.
Daniel McNabb (21:30)
Thanks so much for having me.
Let’s take the next step together
Understanding how to manage, invest, grow, and/or give away multi-million dollar inheritance isn’t easy. Inheritors can encounter a wide variety of different situations requiring knowledge and finesse to manage. If you need more help, reach out to Katherine Fox, CFP® and CAP®, financial planner for inheritors, to learn how Sunnybranch can help you evaluate your financial situation and build a plan for your financial future.
