The truth is finally starting to emerge about socially responsible investing
Tuesday, June 20, 2017
CNBC reviewed years of Morningstar data on the performance of socially responsible funds versus traditional funds and benchmarks and found that there is no significant performance drag.
With one key caveat: Funds designed to exclude stocks, such as the “sin” sectors — no tobacco, alcohol and guns — don’t tend to measure up.
Jon Hale, head of sustainability research at Morningstar, said academic research has shown that stock exclusion tends to be a negative factor in performance, while companies that score highly on ESG metrics (environmental, social and governance) show performance that is consistent with traditional benchmarks.