ESG: Investing for Good or for Performance. Why Not Both? | ETF Trends

In the past, ESG investing carried the criticism that its investors had to make certain concessions in order to align portfolios with their values. But research shows you don’t have to sacrifice performance when choosing investments for their positive impact. By tapping into smarter data analysis, and insight on material ESG risks and opportunities, investing for good can become better for investors.

In the upcoming webcast, ESG: Investing for Good or for Performance. Why Not Both?, David Mazza, Managing Director, Product, Direxion; and Noel Friedman, Executive Director, ESG Research Products, MSCI, will look to ESG investing strategies, consider how it is different from Socially Responsible Investing or Impact Investing and outline ways for investors to effectively integrate ESG into a diversified portfolio.

For example, the recently launched Direxion MSCI USA ESG – Leaders vs. Laggards ETF (Ticker: ESNG) delivers a unique approach to ESG investing that is long and overweight companies with high ESG ratings and is also short those with low ESG ratings, providing investors a more complete view on both the leaders and laggards in ESG issues within the MSCI USA universe.

The Direxion MSCI USA ESG – Leaders vs. Laggards ETF aims to offer more pronounced exposure to environmental, social and corporate governance leaders, while simultaneously having a short position in those that significantly lag behind, as defined by MSCI’s market leading ESG metrics.

The ETF tracks an index that measures both the ESG rating, as well as the rating trend, of companies relative to their sector peers. Utilizing a 150/50 structure, the index methodology creates an extended exposure (equal to 150% of net assets at rebalance) to the 100 highest scoring ESG companies, while having a short position (50% of assets) to the 100 lowest scoring companies, in the MSCI USA universe, with a net long exposure of 100% (that is, no net leverage).

It is the first ESG ETF of its kind offering such an exposure.

Financial advisors who are interested in learning more about ESG-related strategies can register for the Thursday, March 5 webcast here.