One of the pitches for socially conscious stock funds has been that their performance won’t differ that much from the stock market’s. In theory, that lets you invest according to your values while approximating the market’s return.
This year’s stock market swoon has shown that to be painfully true — and then some. Socially responsible stock funds haven’t just fallen in step with the S&P 500. They’ve sunk a bit more.
The stock funds tracked by Morningstar dropped about 26.4 percent this year through Sept. 30, while the S&P 500 was down about 23.9 percent.
The offerings are better known as environmental, social and governance, or E.S.G., funds. That name stems from the fact that their managers, in making investment decisions, weigh environmental, social and corporate governance factors alongside financial ones.
Read full article on New York Times.
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