Sustainable ETF Investments That Could Diversify, Enhance a Portfolio

Socially responsible ETF strategies that try to capture environmental, social and governance principles can help investors diversify and enhance their portfolios in a meaningful way while leaving a positive impact on the world.

In the upcoming Disruptive ETF Virtual Summit, an online virtual conference hosted by ETF Trends on Thursday, Oct. 18, 2018, OppenheimerFunds will cover the topic of ESG or environmental, social and governance investing that targets investors who are guided by various principles and seek out companies that strive to do social good.

ESG investments have already gained wider popularity in Europe, with much of the demand coming out of institutions. Corporations in Europe are more focused on societal good, which is different than how we think about corporations in the United States, but it is slowly starting to change.

Beyond backing the well being of the world we live in, the ESG-related strategies may also benefit investment portfolios as well. ESG is seen as a means to manage downside risks, along with the potential to enhance returns.

Academic research has revealed that strong governance mechanisms have helped diminish default risk and lower bond yields. The ESG principle are more of a way of living or conducting business that correspond with a firm’s core values. Many companies have defined their corporate social responsibility to account for their impact on the environment and social welfare even if there is no legal requirement.

Investors who believe in the positive attributes of a socially responsible ETF strategy may consider options like the Oppenheimer ESG Revenue ETF (NYSEArca: ESGL) and Oppenheimer Global ESG Revenue ETF (NYSEArca: ESGF).