If you hear an odd sound when it comes to environmental, social and governance (ESG) investing, it’s the whistling of tailwinds behind a space that should continue to see growth through 2020 and beyond. CNBC reported on the latest data from ESG and it should have investors in the space excited.
Some statistics from the CNBC report:
- 14 out of 17 ESG ETFs and funds outperformed the S&P 500 from January 1 to May 15, based on data from S&P Global Market Intelligence.
- Morningstar stated that 23 new ESG funds launched in 2020, which will make it a record year for ESG fund launches.
- Sustainable funds hit record net flows in 2019, which equates to four times the previous high, according to Morningstar.
“The drivers in 2020 are clear,” the CNBC report said. “The most obvious example is the collective response to the Covid-19 pandemic, which has compromised our interconnected world. Social inequality has also come to the fore amid civic protest and global unrest. What this first half of the year tells us is that ESG risks increasingly are playing a central role across the entire investment landscape.”
ETF investors looking for plays in ESG can look to funds like the FlexShares STOXX US ESG Impact Index Fund (ESG ). For investors who want ESG exposure, as well as global diversification, can look to the FlexShares STOXX Global ESG Impact Index Fund (ESGG ).
ESG seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the STOXX® USA ESG Impact Index. The underlying index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to ESG characteristics relative to the STOXX® USA 900 Index, a float-adjusted market-capitalization weighted index of U.S.- incorporated companies. Under normal circumstances, the fund will invest at least 80% of its total assets in the securities of the underlying index.
ESGG seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the STOXX® Global ESG Impact Index. The index is designed to reflect the performance of a selection of companies that, in aggregate, possess greater exposure to environmental, social, and governance characteristics relative to the STOXX® Global 1800 Index, a float-adjusted market-capitalization weighted index of companies incorporated in the U.S. or in developed international markets. The fund will invest at least 80% of its total assets in the securities of the index and in ADRs and GDRs based on the securities in the index.