We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 ESG Funds to Buy As Sustainable Investing Gathers Steam
Read MoreHide Full Article
The coronavirus pandemic has impacted investments in more than one ways. The changed mindset of the society was clearly reflected in ESG investing in first-quarter 2020. ESG investing or investments that consider the environmental, social and corporate governance impact of a company, emerged as s strong trend in the said timeframe.
Mutual fund investors could consider the record inflows ESG mutual funds witnessed in the quarter ended March 2020 and take up a couple of funds for investment.
ESG Funds Witness Record Inflow in First-Quarter 2020
In the first quarter of this year, investors put in as much as $45.7 billion in sustainability-focused funds worldwide, while mutual funds under the broader umbrella had an outflow of $384.7 billion, per Morningstar data.
In the United States, ESG funds witnessed a record $10.5 billion in inflows in first-quarter 2020, although investments slowed down comparatively by March. But now that investors have returned to markets, one may expect the pace to pick up for sustainable funds ahead. To put things in perspective, inflows in the quarter ended March 2020 were more than 50% of the record $21.4 billion in inflows into sustainability-focused fundslast year.
Second, the pandemic has attracted investors’ focus on sustainable investment. This trend could be here to stay, since investors now have an idea of how companies responded to the pandemic by focussing on their goals over the long term rather than making profit in the near term at all costs.
3 Funds to Buy
We have, therefore, selected three sustainability-focused mutual funds. All of these funds carry a Zacks Mutual Fund Rank #2 (Buy). In addition, the minimum initial investment for these funds is within $5,000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Environment and Alternative Energy Portfolio (FSLEX - Free Report) fund aims for capital growth. The fund invests the majority of its assets in securities of companies mostly engaged in activities related to alternative and renewable energy, energy efficiency, pollution control, water infrastructure, waste and recycling technologies or other environmental support services. The non-diversified fund invests in U.S. and non-U.S. issuers alike.
This Zacks Sector – Other has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSLEX has an annual expense ratio of 0.85%, which is below the category average of 1.09%. It has returned 4.9% over the past five years. The fund has no minimum initial investment.
Parnassus Core Equity Fund - Investor Shares (PRBLX - Free Report) aims for capital growth and current income through its investments. The fund invests in a diversified portfolio of equity securities. PRBLX invests in large-capitalization companies in the United States that have long-term competitive advantages and relevancy, quality management teams and positive performance in the ESG criteria.
This Zacks Sector – Large Cap Value has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PRBLX has an annual expense ratio of 0.86%, which is below the category average of 0.93%. It has returned 9.1% over the past five years. The fund has a minimum initial investment of $2000.
TIAA-CREF Core Impact Bond Fund Retail Class (TSBRX - Free Report) aims for total return, mainly through current income. The fund invests the majority of its assets in bonds. TSBRX gives particular consideration to environmental, social and governance criteria. It invests in a wide range of investment-grade bonds and fixed-income securities.
This Zacks Sector – Inv Grade Bond-Intermediate has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
TSBRX has an annual expense ratio of 0.65%, which is below the category average of 0.80%. It has returned 3.2% over the past five years. The fund has a minimum initial investment of $2500.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week.
Image: Bigstock
3 ESG Funds to Buy As Sustainable Investing Gathers Steam
The coronavirus pandemic has impacted investments in more than one ways. The changed mindset of the society was clearly reflected in ESG investing in first-quarter 2020. ESG investing or investments that consider the environmental, social and corporate governance impact of a company, emerged as s strong trend in the said timeframe.
Mutual fund investors could consider the record inflows ESG mutual funds witnessed in the quarter ended March 2020 and take up a couple of funds for investment.
ESG Funds Witness Record Inflow in First-Quarter 2020
In the first quarter of this year, investors put in as much as $45.7 billion in sustainability-focused funds worldwide, while mutual funds under the broader umbrella had an outflow of $384.7 billion, per Morningstar data.
In the United States, ESG funds witnessed a record $10.5 billion in inflows in first-quarter 2020, although investments slowed down comparatively by March. But now that investors have returned to markets, one may expect the pace to pick up for sustainable funds ahead. To put things in perspective, inflows in the quarter ended March 2020 were more than 50% of the record $21.4 billion in inflows into sustainability-focused fundslast year.
Second, the pandemic has attracted investors’ focus on sustainable investment. This trend could be here to stay, since investors now have an idea of how companies responded to the pandemic by focussing on their goals over the long term rather than making profit in the near term at all costs.
3 Funds to Buy
We have, therefore, selected three sustainability-focused mutual funds. All of these funds carry a Zacks Mutual Fund Rank #2 (Buy). In addition, the minimum initial investment for these funds is within $5,000.
We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Fidelity Select Environment and Alternative Energy Portfolio (FSLEX - Free Report) fund aims for capital growth. The fund invests the majority of its assets in securities of companies mostly engaged in activities related to alternative and renewable energy, energy efficiency, pollution control, water infrastructure, waste and recycling technologies or other environmental support services. The non-diversified fund invests in U.S. and non-U.S. issuers alike.
This Zacks Sector – Other has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
FSLEX has an annual expense ratio of 0.85%, which is below the category average of 1.09%. It has returned 4.9% over the past five years. The fund has no minimum initial investment.
Parnassus Core Equity Fund - Investor Shares (PRBLX - Free Report) aims for capital growth and current income through its investments. The fund invests in a diversified portfolio of equity securities. PRBLX invests in large-capitalization companies in the United States that have long-term competitive advantages and relevancy, quality management teams and positive performance in the ESG criteria.
This Zacks Sector – Large Cap Value has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
PRBLX has an annual expense ratio of 0.86%, which is below the category average of 0.93%. It has returned 9.1% over the past five years. The fund has a minimum initial investment of $2000.
TIAA-CREF Core Impact Bond Fund Retail Class (TSBRX - Free Report) aims for total return, mainly through current income. The fund invests the majority of its assets in bonds. TSBRX gives particular consideration to environmental, social and governance criteria. It invests in a wide range of investment-grade bonds and fixed-income securities.
This Zacks Sector – Inv Grade Bond-Intermediate has a history of positive total returns for more than 10 years. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
TSBRX has an annual expense ratio of 0.65%, which is below the category average of 0.80%. It has returned 3.2% over the past five years. The fund has a minimum initial investment of $2500.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week.
Get it free >>