Authors
Mark Trevitt and Liesel van Ast (Trucost), Bud Sturmak (RLP Capital)
The carbon footprints, performance, and risk characteristics of the eight biggest Traditional equity mutual funds (by asset size) with the eight largest Responsible equity mutual finds were compared. The effects of ESG analysis employed by responsible investment managers were evaluated. While traditionally managed mutual funds use an investment approach that relies solely on traditional financial analysis, responsible investment managers incorporate both traditional financial analysis and ESG analysis. In this study funds incorporating ESG analysis outperformed over on-year and three-year periods, exhibiting higher risk-adjusted performance over a three-year period to end-June 2010. They also demonstrated smaller carbon footprints than Traditional funds.