ESG investing is booming. What about returns?
ESG investing has become popular recently, but this is not the latest trend on Wall Street.
Asset management start-up Arabesque found that S&P 500 companies in the top quintile for ESG outperformed those in the bottom quintile by more than 25% between 2014 and 2018.
Moreover, at the end of 2020, the group of sustainable open-end funds and exchange-traded funds available to U.S. investors numbered 392, up 30% from 2019. The group has experienced a nearly fourfold increase over the past 10 years, with significant growth beginning in 2015, according to Morningstar.
1. Why ESG companies tend to outperform other stocks?
I guess you're not aware that these companies are ESG stocks.
$Microsoft(MSFT.US$ , an ESG-focused company, has gained 40% this year so far, while $S&P 500 Index(.SPX.US$ up 21.8% over the same period. More about its commitments could be checked on its official website.
2. How to invest in ESG stocks and funds?
3. Is there any risk of investing in ESG stocks?
You might also like this: What is ESG investing?
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