“At the end of the third quarter, 1,238 funds claiming to “promote” environmental, social and good governance goals held stocks in the industry classification code Aerospace & Defense, according to Morningstar Inc. data. That’s roughly 25% more than in March last year, right after Russia invaded Ukraine. A large portion of those funds converted to “ESG” during the period, Morningstar said.”

[COMMENTARY] Nothing like rising stock prices in a sector to attract fund managers. ESG and sustainable funds have taken big hits recently, so these funds are looking for performance enhancers and some have been attracted to defense stocks. As I’ve previously said, investments in defense-related stocks should be an individual decision and funds investing in defense stocks might require some investors to rethink their holdings.
Asset Managers Quietly Add ‘ESG’ to Portfolios of Defense Stocks, by Frances Schwartzkopff, Natasha White and Natalia Drozdiak, November 24, 2023, Bloomberg News, USA.