Sustainable funds saw record inflows during the first quarter, and experts say that in the aftermath of Covid-19, this investing approach will become all the more important.
) garnered $493 million in new capital. All three funds have returned between 9% and 10% over the last month, although they remain in negative territory for the year.Before the pandemic, stakeholder capitalism — the idea that companies' sole focus shouldn't be deepening shareholder pockets — was growing in popularity.
"This global pandemic has really put in pretty sharp relief the importance of how corporations treat their stakeholders, in particular their employees and their customers," said Hale. "So much of even corporate value these days is based on intangible assets like your reputation, and I think stakeholders will remember how companies either rose to the occasion or failed to rise to the occasion during the pandemic and that will pay off for them down the line.
Andy Howard, head of sustainable research at Schroders, added that Covid-19 will likely spark increased interest in trends that have been building, such as employee protection. Since March more than 40 million people have filed for unemployment protection in the U.S., with minority workers typically faring worse. "That's not a new trend; we've been talking about it for a while," said Howard.
Looking through the holdings of actively managed funds, RBC found that Microsoft was the most highly owned stock, appearing in 55% of funds. Alphabet and Visa were in 47% and 42% of funds, respectively, while Apple and Xylem rounded out the top five, appearing 35% and 34% of the time, respectively. Of the twenty stocks most commonly found in ESG funds, 75% are outperforming the S&P 500 this year, the firm found.
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