Tuesday
June 20
2017

The truth is finally starting to emerge about socially responsible investing

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.

Source: CNBC (link opens in a new window)

Categories
Investing
Tags
ESG, ESG investing, impact investing, social impact, SRI, stock market