I admire people who don’t set ethics aside when they invest. That said, the conversation about what you would give up in the pursuit of socially responsible gains must be fully acknowledged. There has been a recent trend among financial professionals to downplay the performance sacrifices that occur when you decide to make an investment in a socially responsible fund. This is ironic that someone peddling socially responsible investing would start off the conversation with a lie, but it also provides disutility down the road when someone investing in a socially responsible mutual fund finds himself reaping returns that are lower than he is led to believe.
The impetus for my article is a comment from Morningstar analyst David Kathman, who said in a Kiplinger interview that: “There is no evidence that shows ESG or socially responsible investing helps or hurts performance. Over the long term, it probably evens out.”… Read the rest of this article!