ESG May Be Smart, But Not Yet Smart Beta

For the time being, ESG investing is smart – but is it smart beta?

As investing based on a desire to drive progress in environmental, social and corporate governance issues grows, so too does the prospect of using ESG methodologies as a smart beta-style factor that delivers financial returns over time.

As asset managers offer more passive smart beta indexes and ESG-weighted strategies, more of the world’s assets are following them. According to recent FTSE Russell research, both smart beta and ESG strategies are becoming more popular with investors, especially in Europe, where 60 percent of the respondents in a 2017 study said they would be interested in applying ESG overlays to their smart beta strategies.
Source: FA Magazine

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