Looking to match your investment portfolio with your beliefs? Recent signs indicate you are not alone.
Some of the biggest names in the investment business appear convinced there is a growing investor demand for portfolios that reflect concerns about environmental, social and governance issues.
For example, Fidelity Investments recently launched two new “sustainability-focused” index mutual funds that are among the lowest-cost options for such ESG funds.
The two new offerings are the Fidelity U.S. Sustainability Index Fund and the Fidelity International Sustainability Index Fund.
In launching the funds, Fidelity said, “we expect the ESG factors used in the new funds to help many investors better align their personal principles with their investment objectives.”
The two Fidelity sustainability funds will seek to track indices developed by MSCI ESG Research to provide exposure to companies with “high environmental, social and governance (ESG) performance” as compared to their peers.
Readers shouldn’t take this mention of the new Fidelity funds as a recommendation. However, we are certainly intrigued and will be monitoring them. So far, they’ve been trading barely a month.
We are encouraged by the low expense ratios each fund carries -- starting at .21% for the U.S. fund and .30% for the international version.
The introduction of these new Fidelity funds follows last year’s debut of a new Morningstar Sustainability Rating for funds along with sustainability scores based on ESG factors.
“Sustainable investing is no longer a niche activity,” declared Morningstar founder Joe Mansueto. “New generations of investors around the world are looking for ways to learn whether the investments they own reflect the best sustainability practices, because sustainability aligns with their personal values or simply because they believe it leads to better investment outcomes.”
The new Morningstar scoring uses globes to rate funds on a scale of one to five with five-globe funds deemed to have the best sustainability records.