The real reason some ESG funds outperform
Portfolio gaming may lead to premiums over other funds, study finds.
(Mark Hulbert, an author and longtime investment columnist, is the founder of the Hulbert Financial Digest; his Hulbert Ratings audits investment newsletter returns.)
CHAPEL HILL, N.C. (Callaway Climate Insights) — The superior performance of your ESG fund may not mean what you think it does.
Many are quick to conclude that any strong performance of an ESG fund is evidence that you can both do good and do well. But a new study finds that ESG funds’ outperformance may be caused by something far more mundane: The gaming behavior that many mutual fund companies undertake in order to artificially enhance the performance of their ESG funds.
The study, titled “ESG Spillovers,” began circulating earlier this month from the National Bureau of Economic Research. It was conducted by Sheridan Titman of the University of Texas at Austin and Shangchen Li, Hongxun Ruan and Haotian Xiang of Peking University…
Subscribe to Callaway Climate Insights to keep reading this post and get 7 days of free access to the full post archives.
Contact [email protected] for any questions or corrections.
Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.
