Armed with this data, investment firms are now able to better offer products that cater to specific investors’ needs in order to develop SRI/ESG products that could gain more traction in the investment community. Among the issues that were important to investors included environmental issues, global sustainability and corporate governance.
“One thing that the industry is somewhat challenged with is to provide very nuanced and personal ESG strategies that can still have broad appeal,” said Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors.
Values Over Profits
Another interesting note derived from the study is lesser emphasis on profitability in the retail ETF investor space, specifically by millennials.
“Within the retail community or more millennials, there’s more of an emphasis placed on social and environmental output than the return aspect,” said Bartolini. “The byproduct of that is the ESG/SRI decision-making tends to be very personal.”
While the study did reveal detractors from SRI/ESG investments as a result of lower performance, it all boils down to what these funds are designed to accomplish–aside from pulling in investor capital, they are also designed to pull at the heart strings of these investors and to make social impacts they value the most. The biggest challenge still remains of ensuring that prospective investors are educated and aware of these products in order to obtain the broader appeal it deserves.
“Education is ultimately the most important,” said Bartolini.
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