Content and data provided by various third parties and Fidelity − Terms of Use | Help/Glossary
Research > ETFs > ETF / ETP Commentary > 

ESG Reality Brighter Than Perceived

BY | ETF Database
10/11/2024 | 137 VIEWS
These days, there’s plenty of talk about disinformation and misinformation. Some of it may well be applicable to environmental, social, and governance (ESG) investing, which has taken a beating in the court of public opinion.Hear enough negativity about ESG investing and you may assume it’s on its last legs. That’s perception. In good news for ETFs like the Invesco ESG Nasdaq 100 ETF (QQMG B+) and the Invesco ESG Nasdaq Next Gen 100 ETF (QQJG C+), the reality is far brighter than current perceptions indicate. Said another way, obituaries penned about ESG investing were premature. Still, ETFs like QQJG and QQMG have hills to conquer. Media coverage, which created some of the glum perception, hasn’t been great. “Fewer are the celebratory articles that were abundant three years ago around climate pledges, SEC moves against greenwashing, and the latest COP gathering. Based on the headlines, one might think that ESG is finished, that people who were incorporating these principles into their investment processes were quietly backing away,” noted Morningstar’s Hilary Wiek.QQMG, QQJG Have the GoodsGreenwashing is a long-running concern among asset allocators that want to embrace ESG. Some investors are reserved because they’re fearful companies and funds are inaccurately boasting about ESG credentials. Regarding QQJG and QQMG, the ETFs’ index methodologies ensure ESG purity and greenwashing is mitigated. Beyond avoidance of greenwashing, it’s not surprising that performance is a marquee issue for money managers. They want to know that allocating capital to ESG strategies doesn’t put them at risk of subpar returns. Over their respective lifespans, QQJG and QQMG have done admirable jobs of allaying those concerns. “Our survey shows, however, that 55% of respondents who make impact investments prioritize market-rate returns as the primary objective when evaluating a potential investment opportunity,” added Wiek. “Only 7% said that concessionary returns are a top priority, with the remainder saying they’ll consider both market-rate and concessionary return impact opportunities. While concessionary return strategies do exist, when evaluating impact funds, the assumption shouldn’t be that every such fund is concessionary.” As Wiek points out, many ESG devotees remain committed to the style. Additionally, a fair percentage of market participants aren’t in that cohort but are at least examining the strategy. Those could be signs the long-term reality is far better than current perceptions imply. For more news, information, and analysis, visit the ETF Education Channel.

More Commentary

Active ETFs Offer Tax Perks, Too
BY | ETF Database
4:50 am ET 11/21/24 | 57 VIEWS
Sell on the Pop Prospects: November 20 Edition
BY | ETF Database
11/20/2024 | 25 VIEWS
The Case for Active Investing in 2025
BY | ETF Database
11/20/2024 | 63 VIEWS
View more Commentary

Search Commentary

Enter Keyword(s)
Filter Results

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.

Copyright 1998–2024 FMR LLC. 
All rights reserved.