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Chart of the Day: To ESG or Not to ESG

Today’s Chart of the Day from Morningstar shows an increase in the closing of ESG Funds (Environmental, Social, and Governance funds).

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Today’s Chart of the Day from Morningstar shows an increase in the closing of ESG Funds (Environmental, Social, and Governance funds).

ESG funds invest in companies that operate with sustainable and ethical practices. They were very popular a few years ago; however, they are now closing at an increasing rate. Oddly enough, it’s not due to poor performance. Over the last five years, if you invested $100 into an ESG fund it would have grown to $157 vs. $160 in the S&P 500. Many attribute the decline to their higher fees, declining interest since they are not “outperforming” as promised, along with the minimal evidence that these funds are able to instigate any meaningful societal changes.

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