Money is pouring into exchange-traded funds that bill themselves as socially conscious.
This year investors have put a record $27.4 billion into ETFs traded in U.S. markets that say they focus on environmental, social and corporate governance, or ESG, practices, according to data from FactSet, doubling the size of the sector.
The surge suggests ESG investing has staying power, answering those who had questioned whether investors would give priority to goals such as promoting clean energy over simply picking the best-performing stocks regardless of companies’ principles. Expectations for new legislation aimed at combating climate change under a Biden administration are likely to stoke demand for ESG funds over the coming years, and several asset managers are rushing to meet that demand.
