Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Portfolio Strategies
    • Retirement Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ESG Channel
  2. Investment Managers Remain Enthusiastic About ESG
ESG Channel
Share

Investment Managers Remain Enthusiastic About ESG

Tom LydonJun 27, 2022
2022-06-27

Growth stock weakness is hampering many environmental, social, and governance (ESG) strategies, including exchange traded funds, but in a positive sign for this investing style, some professional market participants remain constructive on the long-term prospects.

That could be a positive for long-term adoption of ETFs such as the SPDR S&P ESG ETF (EFIV B+). Home to nearly $432 million in assets under management, EFIV follows the S&P 500 ESG Index, which is the ESG offshoot of the traditional S&P 500.

“Most of the demand has been from institutional investors, but there are signs that ESG momentum is gaining traction with retail investors, too. Sustainable fund net inflows accelerated in 2020–2021, and although the pace slowed in 1Q22, it did not slow by as much as that of conventional funds,” according to Fitch Ratings.

Recently, regulators are showing willingness to scrutinize ESG strategies and punish firms engaging in greenwashing and related offenses. While that sounds ominous, those regulatory moves could have positive long-term implications for funds such as EFIV because the SPDR ETF features a non-controversial, easy-to-convey approach to ESG investing.

“Regulators are increasingly acting to deter and penalise greenwashing. In May 2022, the SEC charged the fund-management arm of BNY Mellon for mis-statements and omissions about ESG considerations in making investment decisions, which led to a USD1.5 million penalty,” added Fitch.

As a result of regulators keeping a more watchful eye as ESG and sustainability funds proliferate, disclosure requirements are becoming a focal point. That could create added allure for passive products such as EFIV among asset allocators who are looking for ESG exposure in a no-nonsense fashion.

“Disclosure requirements for sustainable products are one of the main regulatory themes facing the industry. The EU implemented its Sustainable Finance Disclosure Regulation in 2021 to make funds more transparent and easier to assess in terms of sustainability. Regulators in other regions are taking similar initiatives,” noted Fitch.

EFIV is cost-effective, as highlighted by an annual fee of just 0.10%, or $10 on a $10,000 investment. The fund holds 307 stocks across the 11 GICS sectors, including an almost 30% allocation to technology stocks. Broadly speaking, EFIV’s favorable expense ratio and easy-to-understand methodology could set up the ETF for long-term success.

“Notwithstanding the risks of greenwashing, we expect sustainable product offerings to become increasingly important as a competitive necessity, particularly as sustainability definitions become more harmonized,” concluded Fitch.

For more news, information, and strategy, visit the ESG Channel.

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X