“At the end of third quarter, ESGL’s holdings had a weighted average market value of almost $99.1 billion, underscoring the fund’s large-cap focus. More importantly, ESGL has rapidly earned Morningstar’s 5 Globes rating, that research firm’s highest rating for ESG and sustainable investments,” reports Investopedia.
The index’s rules-based methodology tries to improve their performance return through weighting each security in the index by top line revenue. Components are then rebalanced every quarter to keep the Revenue Weighted Indices in line with the companies’ most recently reported revenue levels.
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.
“In additional to its ESG foundation, ESGL’s revenue-weighted methodology can help investors avoid overvalued stocks while providing exposure to undervalued names at a time when the value factor is widely expected to rebound in 2018,” according to Investopedia.
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