While the idea of socially responsible investing (SRI) is taking flight, many advisers and investors are still pondering the ability of these strategies to deliver comparable or better returns relative to traditional equity benchmarks. Still, more companies are noting the importance of ESG themes.
With ESG and sustainable ETFs seen as a primary avenue for engaging millennial investors, more issuers are rolling SRI funds.
Popular BlackRock ESG ETFs include the iShares MSCI KLD 400 Social ETF (NYSEArca: DSI) and the iShares MSCI USA ESG Select ETF (NYSEARCA: SUSA). Other well-known funds in this category include the Oppenheimer ESG Revenue ETF (NYSEArca: ESGL) and Oppenheimer Global ESG Revenue ETF (NYSEArca: ESGF).
Sustainable investing can be defined “as combining traditional investing with sustainability-related insights in an effort to reduce risk and enhance long-term returns,” said BlackRock in a recent note. “Assets in dedicated sustainable investing strategies around the world have grown at a rapid clip in recent years. We are seeing a surge in clients’ interest in incorporating sustainability-related insights into their investments.”
According to a recent survey, Sustainable Signals: Growth and Opportunity in Asset Management, from the Morgan Stanley Institute for Sustainable Investing and Bloomberg, a majority of U.S. asset managers are now practicing sustainable investing and view it as a strategic business imperative. Specifically, 75% of respondents revealed that their firms have adopted sustainable investing, compared to 65% in 201
Accelerating Demand
Investors’ demand for ESG and sustainable investing strategies is expected to grow in significant fashion in the years ahead.