Late last year, a Harvard study found that 68% of the holdings in many mutual funds marketed with ESG standards were exactly the same as those in other broad-based funds outside the category. ESG investors were paying an average of 20 basis points more per year for investments that weren’t all that different, the researchers concluded.
The report added fuel to a debate that’s been raging for decades. Is socially responsible investing (sometimes called “sustainable investing”) an overpriced marketing gimmick?
Chief Investment Officer Matt Dmytryszyn, recently spoke with Financial Advisor magazine and emphasized the crucial role of ensuring that an ESG fund is consistent with the values that an investor seeks, and highlighted the significance of conducting due diligence or seeking the guidance of an advisor who has already done so.