FINSUM

FINSUM

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Friday, 02 July 2021 16:51

Are ESG Funds Worth it?

(New York)

Any advisor likely already knows it, but it is worth repeating: ESG funds are troubling space. They are significantly more costly than traditional funds, have middling returns, and perhaps worst of all, these days they seem quite undifferentiated from conventional funds. One of the big problems in the space is that there is no universal definition of ESG or standard convention for defining ESG risks or parameters, so anyone can call anything “ESG”. For example, take a look at the top ten holdings of two funds, one a basic S&P 500 tracker, the other labeled “Large Cap ESG”, and you will see they have virtually no differences except that the ESG fund costs 40 bp at best and the conventional fund costs 9 bp.


FINSUM: Some people call ESG a pure marketing scam. To some extent that is true as it is pretty easy for fund providers to take advantage of ESG pricing without really doing anything under the hood. But at the same time, there is also genuine interest on the consumer and provider sides to expand opportunities in the space.

(New York)

General Electric is a withered giant. Sure, it has ridden the comeback since the start of the pandemic, but it's so far off the $30 price tag of five years ago. However, Goldman Sachs sees a better future in the tea leaves for GE. In a memo to investors, Goldman set a $16 price target for GE and sees it as a ‘self-help’ success story. Goldman alludes to the repaired finances and leverage under the CEO Larry Gulp. Additionally, a global recovery, higher energy consumption, and better margins could push their stock higher, potentially a $20 price target. Earning projections remain strong for GE through the end of the year.


FINSUM: General electric is in a solid cheap position and Goldman might have been on to something as the stock lifted to $13 early in the week.

(New York)

Stock and commodity prices have been all over the place of late…see the full story on our partner Magnifi’s site

(Tokyo)

The Fed is once again shaking the financial world as tapering signals are trickling in…see the full story on our partner Magnifi’s site

(New York)

The chip shortage of 2021 has been an ongoing saga that has benefited many of the largest manufacturers…see the full story on our partner Magnifi’s site

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