Analysis: Three Things To Know About ESG Fund Behaviour During the Pandemic
By Lihuan Zhou and Yili Wu and Joseph Heavner
One bright spot in the unprecedented stock market volatility brought on by the Covid-19 pandemic is that most US environmental, social and governance (ESG) index funds are outperforming traditional index funds.
Index funds are designed to track specific indexes, like the Dow Jones or S&P 500. They are among the most popular investments by investors, including retirement savers. ESG index funds incorporate data points relating to a company’s ESG profile as well as traditional financial metrics to screen and weight securities.
Most ESG funds now in existence were launched in 2013-2014, when the approach gained momentum. The Covid-19 market crash, the worst single-day drop since 1987, is the first major test of these funds’ resilience.
Photo courtesy of Lorenzo.
Source: Eco-Business (link opens in a new window)
- Categories
- Coronavirus, Investing
