Investment funds set up with ESG criteria remain relative safe havens in the economic downturn caused by the coronavirus pandemic, according to an analysis released Wednesday by S&P Global Market Intelligence.
The analysis of 17 exchange-traded and mutual funds with more than $250 million in assets under management selecting stocks partly on ESG criteria found that 14 have lost less value this year than the S&P 500 index, up from 12 in April. Nuveen Winslow Large-Cap Growth ESG Fund was the top performer, gaining 3.4% in the year through May 15, compared with a 11.4% decline in the S&P 500.
The coronavirus crisis is likely to focus more attention on ESG's social component — how companies treat employees — and on the value of having supply chains in countries with transparent governments, the analysis said. "The acceleration of ESG will only continue, and certainly, the current environment will help with that," said Ewout Steenbergen, executive vice president and chief financial officer at S&P Global, on a May 12 investor call that S&P Global cited in its analysis.
Sustainable investment funds in the U.S. saw a record $10.5 billion of net inflows during the first quarter, according to Morningstar data cited in the analysis.