A strategy or emphasis on environmental, social and governance factors ("ESG") may limit the investment opportunities available to a portfolio. Therefore, the portfolio may underperform or perform differently than other portfolios that do not have an ESG investment focus. A portfolio's ESG investment focus may also result in the portfolio investing in securities or industry sectors that perform differently or maintain a different risk profile than the market generally or compared to underlying holdings that are not screened for ESG standards.
Environmental, Social, and Governance (or ESG) investing is gaining popularity amongst many different types of investors. It’s easy to understand broadly the benefits of socially-responsible investing, but there’s actually a lot behind it. One thing is for certain, the opportunity to do well and do good within a portfolio is an attractive concept to many.
Learn more about ESG investing with our practical guide below.