EFIV - EFIV: Why It Should Continue To Outperform The S&P 500

2024-05-23 13:43:40 ET

Summary

• The EFIV ETF has produced superior returns to the S&P 500 with a lower standard deviation since its inception, and is recommended as a buy for long-term investors.
• The source of outperformance is a quality screen that the S&P performs for a nominal fee. This screen reviews and ranks corporations on the basis of their ESG practices.
• Academic studies show that ESG practices lead to superior financial performance for individual companies for metrics such as ROA, ROE, and the performance of their equity.
• In the past, the superior returns produced by firms with robust ESG practices was captured by fund managers and not passed on to investors. That is not the case with EFIV, its expense ratio is comparable to ETFs that track the broader based S&P 500.

For some reason, Environmental, Social and Governance ((ESG)) Investing has been politicized, often being labelled as “woke”. In fact, ESG Investing has nothing to with some hidden anti-capitalist agenda, and instead, it has everything to do with risk management, numbers, and superior returns for equity holders....

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