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24 March 2021

IPE: Deconstructing 5 Myths about ESG in Index Investing and Tracking Error Considerations


Indexing: A Smart Choice for Sustainable Investing. Indexing is a great choice for investors wishing to incorporate ESG in their portfolios and achieve long-term sustainable returns.

 Aside from being a rigorous, transparent and cost-effective approach, indexing allows investors to tackle global sustainability challenges at scale. 

And last but not least, the issue of tracking error against a strategic benchmark arises in many client conversations around ESG integration. In ESG, Tracking Error and Long-Term Performance, we argue that ESG-related tracking error against traditional benchmarks will become less of a concern as investors adopt the view that ESG integration adds long-term value. This should favour increased ESG adoption.Aside from being a rigorous, transparent and cost-effective approach, indexing allows investors to tackle global sustainability challenges at scale.



© IPE International Publishers Ltd.


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