Date of Graduation
Bachelor of Science in Business Administration
Over the past decade, Environmental, Social, and Governance (ESG) oriented funds have seen a dramatic increase in inflows and many investors have chosen to replace traditional holdings with sustainable ones. Within 5 years, it is projected that ESG exchange traded funds and mutual funds will exceed $53 trillion. Many fund managers claim that ESG funds will outperform traditional funds in the long run. If this claim is accurate, many asset managers would have a fiduciary duty to invest in ESG products. While there is often a non-financial benefit to investing in ESG funds, this paper challenges the claim that they offer a higher risk- adjusted return. By examining the holdings, performance, and expense ratios of non-ESG and ESG funds as well as relying on supporting academic research, this paper concludes that ESG funds offer no statistically significant outperformance over their non-ESG benchmarks.
ESG, ESG Investing, ESG Returns
Hook, M. (2022). An Evaluation of ESG Funds and Their Performance. Finance Undergraduate Honors Theses Retrieved from https://scholarworks.uark.edu/finnuht/78