ESG Funds Prove Unsustainable

According to a recent report, billions of dollars have been pulled out of environmental, social, and governance (ESG) funds this year. Analysts predict that a major course correction may be imminent due to political backlash and trailing returns that have caused investors to shy away from the investment strategy. Domestic ESG-labeled ETFs have collectively lost $5.8 billion year-to-date, and the largest ESG index fund, the iShares ESG Aware MSCI USA ETF (ESGU), has shed nearly $6.3 billion. Additionally, several ETF providers have dropped the ESG label due to concerns, including escalating leftist intolerance and rancor. Despite this, ESG remains a focus for many firms, with a recent survey indicating that more than a quarter of respondents would be most keen to launch a fund with broad consideration of ESG issues.