“In recent years, ESG-related investments have consistently outperformed their counterparts. That, however, could be an accident — many ESG funds invest heavily in tech companies, and tech most likely is rallying for reasons that have nothing to do with ESG. Many ESG funds exclude fossil fuel investments, but fossil fuel investments could also be doing poorly for reasons that have nothing to do with ESG. Look closely, and it appears that ESG is just another old-fashioned stock market bubble.”
[COMMENTARY] The writer makes a few valid points–though overemphasized in my view. Yes, tech is doing well — partly because of the lock-downs. And fossil fuels doing badly as a result of them. However, one can’t escape the fact that many industries are simply preferred by the 50%-80% of investors who want to invest ethically and sustainably!
ESG Investing Looks Like Just Another Stock Bubble, by Jared Dillian, October 5, 2020, Financial Advisor, USA.