ESG Underperformance Will Be Its Undoing

ESG underperformance will be the strategy’s eventual undoing. We have discussed the many problems with ESG investing in previous posts.

In those previous articles, we primarily focused on the excessive expense ratios charged for funds that are essentially duplicates of low costs benchmark indexes. To wit:

With ESG now the rage, the “demand” drives product development. However, there is also an understanding of why large asset managers have embraced the strategy so readily – higher fees.

Yes, you too can own an ESG fund that is almost three times as expensive as the S&P 500 index, all for the sake of “feeling good about yourself.”

ESG Underperformance, ESG Underperformance Will Be Its Undoing

While ESG investing gets promoted as a way for individuals to “invest with their principals,” such has been a windfall marketing scheme by Wall Street firms.