Zeus: The Christmas lesson behind a sustainable fund massacre

By David Callaway, Callaway Climate Insights

(David Callaway is founder and Editor-in-Chief of Callaway Climate Insights. He is the former president of the World Editors Forum, Editor-in-Chief of USA Today and MarketWatch, and CEO of TheStreet Inc.)

SAN FRANCISCO (Callaway Climate Insights) — In the 48 hours before Christmas just two weeks ago, one of Europe’s most well-known pension funds quietly pulled its assets out of what had been the second-largest sustainable emerging markets fund.

So quietly that the business media wasn’t on to the story for almost a week, but not quietly enough to muffle a key lesson for investors in certain sustainable funds.

The BlackRock iShares ESG MSCI EM Leaders ETF (LDEM) had launched with much fanfare in early 2020, just before Covid hit, including a $600 million launch investment from Ilmarinen Mutual Pension Insurance, Finland’s oldest pension fund company. By the time Ilmarinen pulled the plug on its investment, the fund’s assets had grown to more than $800 million, through performance and other fund purchases by investors. . . .

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