The two biggest trends in the world of ETFs over the last few years could be smart-beta and environmental, social and governance (ESG) investing.

While smart-beta seems to be working in investors’ favor and has seen its assets grow exponentially, ESG ETFs have pretty much stalled. Much of that stalling could be attributed to the sector’s historical pretenses, humble beginnings and underperformance.

But investors may want to take a look at ESG and socially responsible investing (SRI) ETFs once again.

ESG has evolved beyond simply excluding tobacco and gun stocks. Thanks to better screening methods and different methodologies, ESG ETFs have started to beat their standard index cousins in the returns department. And that may finally get investors excited. In the end, we may have reached the turning point for socially responsible ETFs.

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