'Green' Funds Cost Three Times More Than You Think
Over the five years ended Dec. 31, investors added an estimated $64.6 billion to mutual funds and exchange-traded funds using ESG strategies to invest in U.S. stocks. No wonder green funds outperformed over the past five years, earning an average of 8.1% annually, while non-sustainable funds grew at 6.9%. For most of that period, tech and healthcare boomed, while energy lagged.
Green funds lost 19.7%, faring even worse than conventional funds, which fell 18.1%. In 2015, an analysis of more than 2,000 research papers found striking results. The average green U.S. stock ETF charges 0.17% in annual fees, according to Morningstar-0.05 percentage points more than conventional funds.
On average, according to a new Harvard study, ESG funds have 68% of their assets invested in "The exact same" holdings as non-ESG funds.