The mission of Change Finance is to accelerate the adoption of sustainable and responsible investing so that capital markets promote the business practices and innovation necessary to address our most pressing social and environmental challenges. To meet this goal, it is essential for investors and financial advisors to fully understand the rapidly evolving portfolio management practices related to environmental, social, and governance (ESG) data integration. This report surveys some of the latest trends pertaining to the relative performance of ESG funds, fees, thematic products, and preferences for shareholder advocacy. These findings do not represent asset allocation recommendations. They are intended to provide insights into a wide array of portfolio management approaches so that investors may test assumptions, substantiate conclusions, and consider new ideas.
This report is based on more than 100 proprietary Portfolio Impact Analyses conducted by Change Finance between July 2019 and December 2020. Our Portfolio Impact Analyses utilize data from the non-profit, As You Sow, to reveal portfolio-level risk from factors such as fossil fuel-related investments, carbon footprints, gender equality scores, and deforestation impacts. The analyses do not provide information on fixed income allocations and exclusively consider investments in mutual funds and exchange traded funds (ETFs). For this report, the team at Change Finance specifically focused on those asset allocations with comprehensive ESG integration and examined all investment products from such asset allocations. This produced a sample of 55 ESG-focused mutuals funds and ETFs provided by 27 asset managers. These represent the investment products most commonly used by those investors and advisors in Change Finance's network.
Change Finance, PBC is an independent investment advisor registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Change Finance, including our investment strategies, fees, and objectives is available on our website at www.change-finance.com or by calling 1-303-339-0524. The information provided herein is for educational purposes only and is subject to change without notice. Change Finance reserves the right to modify its current investment strategies and techniques due to changing market dynamics or client needs. All opinions offered are those of Change Finance, PBC and are also subject to change. This material is not financial advice nor is it an offer to buy or sell any product or service. Investing involves risk. Therefore it should not be assumed that any investing strategy made reference to directly or indirectly will be profitable.
The information within this report was researched by Change Finance, PBC with the tools available to the Firm from Change Finance Portfolio Impact Analyses, As You Sow, and Morningstar.
Various indexes were chosen that are generally recognized as indicators or representation of the stock market in general. Indices are typically not available for direct investment, are unmanaged and do not include fees or expenses. Some indices may also not reflect reinvestment of dividends.