YNTR: The Biggest ESG Funds are Beating the Market

You Need to Read Bloomberg Green’s The Biggest ESG Funds are Beating the Market by Mathieu Benhamou, Emily Chasan and Saijel Kishan.

Even with climate-destructive assets still fundamentally mis-priced relative to the climate risks they entail, these top ESG mutual funds (funds that consider a company’s environmental, social, and governance performance alongside profitability) are already outperforming the market. This is truly remarkable considering how much worse it will get for carbon-heavy stocks as physical, liability, stranded asset, and other fiduciary climate risks come to bear. 

Nine of the biggest ESG mutual funds in the U.S. outperformed the Standard & Poor’s 500 Index last year, and seven of them beat their market benchmarks over the past five years.

 

The $878 million Ave Maria Growth Fund was the top performer in 2019, followed by the $3.8 billion Calvert Equity Fund and the $4.9 billion Putnam Sustainable Leaders Fund. All three funds posted gains of more than 35%, compared with the S&P 500’s 31.5% with reinvested dividends. Morgan Stanley’s $3.9 billion Global Opportunity Portfolio and the $2.1 billion Brown Advisory Sustainable Growth Fund placed atop the rankings in the five-year period.

 

“The number one question I used to get from investors is aren’t you limiting your options and sacrificing returns by doing ESG?” said Karina Funk, a one-time civil and environmental engineer who runs the Brown Advisory fund. “I don’t get that question anymore.”

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