“‘The results show that the quality factors (high profitability and low investment) make pronounced positive return contributions to most types of ESG strategies,’ the report added.”
[COMMENTARY] The headline is misleading. What it boils down to is that the concentration on tech and financials in ESG portfolios is largely responsible for their outperformance. When these portfolios are adjusted for such concentration, there’s no outperformance.
Also, I don’t believe this paper is to be published in a peer-reviewed journal. Thus, one always has to be suspect of such study results when they aren’t.
ESG does not generate outperformance, Scientific Beta warns, by Tom Eckett, May 5, 2021, ETF Stream, USA.