Painstaking Progress for Funds That Aim to Do Good (WSJ)

https://www.wsj.com/articles/painstaking-progress-for-funds-that-aim-to-do-good-11553166000

DWS Group Inc., the asset-management business of Deutsche Bank AG , recently raised $843 million in a single day for a new fund that tries to invest in the best corporate citizens in the U.S.

It was one of the most successful exchange-traded-fund debuts of all time, and especially noteworthy in the slow-growing corner of the market devoted to responsible investing.

For years, asset managers have been trumpeting a new dawn for strategies that deliver competitive returns along with a clear conscience. In the past year alone, firms including Vanguard Group, Goldman Sachs Group Inc. and BlackRock Inc.’s iShares have introduced more than a dozen ETFs that use environmental, social and governance scores to pick stocks and bonds.

But investors have been slow to buy into so-called ESG funds. The triumphant inaugural run of DWS Group’s Xtrackers MSCI USA ESG Leaders Equity ETF may signal a step change in investor participation.

Author: Christopher K. Merker, Ph.D., CFA

Christopher K. Merker, PhD, CFA, is a director with Robert W. Baird & Co. Merker holds a PhD in Investment Governance and Fiduciary Effectiveness from Marquette University. He is a past president of the CFA Society Milwaukee and a current board member. An adjunct professor of finance at Marquette University, where he teaches the investment course, Sustainable Finance, he is also executive director of Fund Governance Analytics, LLC, a provider of governance research and diagnostic tools for issuers, asset owners and institutional investors. He publishes the blog, Sustainable Finance, which covers current topics around sustainability in investing (www.sustainablefinanceblog.org)

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