As demand for ESG continues to grow, how is the S&P 500 ESG Index helping investors reinforce core allocations and align objectives with ESG values? S&P DJI’s Maggie Dorn and State Street Global Advisors’ Brie Williams take a closer look at the potential benefits of putting this index to work in purpose-built portfolios.
Due to the Covid-19 pandemic, many investors have taken the chance to have a closer look at their portfolios and investments. The idea is to reimagine a future that contends with the reality and aftermath of the pandemic. This has led to record flows into ESG and ESG-based strategies.
In regards to trends that have formed and whether they will remain in a post-Covid era, Brie believes they will. She states how things are at a critical inflection point based on data, lower-cost solutions, and investment objectives alignment. There are three trends, in particular, that are deriving what’s to come.
There’s the great reset, based on what’s already been seen from this year. Fortunately, the 2010s laid a lot of groundwork for the 2020s to respond to. The second trend comes down to the power of the investor’s reshaping what’s next, and the increased transparency and reporting that’s becoming available helps investors understand ESG from all angles. And the third trend is about the greatest wealth transfer that’s ever been seen in the U.S.’s history. This transfer of wealth is going to allow ESG investing to become mainstream.
Those three trends are going to be essential in helping with the continued demand for ESG ETF assets.
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