Tue, Sep 27, 2022
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: ESG funds perform better with lower costs - ESMA asks why

Thursday, June 16, 2022

Authored by David Naughton and Katrina Smyth from LK Shields, an Irish corporate and commercial law firm.

The European Securities and Markets Authority (ESMA) published a study confirming that funds which include environmental, social and governance (ESG) features were cheaper and better performers compared to non-ESG funds.

In a bid to inform the fund industry on how to make funds more affordable and profitable for retail investors, ESMA considered the possible drivers behind this finding. They found that ESG funds remain comparatively better performing and cheaper, even after controlling for differences in sectoral exposures and portfolio composition, such as ESG funds' orientation towards large cap stocks and developed economies. Further research is required to identify other drivers.

Rationale for Study

An understanding of the costs and performance of funds (both strongly linked) allows investors to make informed decisions and fosters the continuation of increased retail participation in capital markets.

Past analyses of differences in costs and performance between ESG and non-ESG funds found that, even after controlling for the relative youth, growing popularity and larger size of ESG funds, and their comparative share of passive funds, ESG equity UCITS (excluding exchange-traded funds) remained on average cheaper and better performers than their non-ESG peers in 2019 and 2020.

ESMA's study builds on this by seeking to identif......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Castle Hall's DiligenceExchange free Transparency Reports cover 100 managers with $10tn of assets[more]

    Matthias Knab, Opalesque for New Managers: Managers and investors can get free access to DiligenceExchange here: https://bit.ly/DXCInfo Castle Hall, the Du

  2. Other Voices: ESG exuberance is at all-time highs. But will investors buy?[more]

    As investors increase their focus on mission-based investing, they continue to grapple with ESG and what it means to them. By David Shalom, Director of Capital Introductions at Pershing Innovation. New investment solutions. That's how managers deliver value and attract new inve

  3. Opalesque Exclusive: This European mezzanine debt strategy offers equity-like returns with downside protection[more]

    B. G., Opalesque Geneva for New Managers: Mezzanine financier SIG-i operates in a relatively uncrowded space by proactively manufacturing financing solutions as an alternative to traditional debt and equity instrume

  4. Opalesque Video: Systematic Japan strategy follows the 'Keep it Simple' rule[more]

    B. G., Opalesque Geneva: For those looking to invest in the current opportunities underlying managed futures in Japan, here is a strategy that does just that, with the benefits of leverage, shorts, Big Data, proprietary technology, and academic research on market psychology. K2Q Capital'

  5. Opalesque Exclusive: How blockchain is helping the small guy invest in hedge funds[more]

    B. G., Opalesque Geneva: ADDX, Asia's largest private market exchange, is on a mission to democratise the private capital markets through blockchain and smart contract technology. With these technologies, the exchange can eliminate manual interven