Investing in ESG: More than Just a Trend

The FlexShares STOXX US ESG Select Index Fund

Let’s talk about the FlexShares STOXX US ESG Select Index Fund. This fund holds 265 stocks of companies with an ESG score above their industry median. Now, if you’re like me, you might be wondering what on earth ESG even stands for. Well, let me break it down for you. ESG stands for Environmental, Social, and Governance. Basically, it’s a way of measuring a company’s impact on the planet, its people, and its policies.

A Permissive Methodology

So, here’s the scoop on the FlexShares STOXX US ESG Select Index Fund’s methodology: it’s quite permissive. Yes, you heard that right. This fund even includes some oil companies. Now, I don’t know about you, but that definitely raises an eyebrow for me. How can an oil company be considered environmentally friendly? It’s a head-scratcher, for sure.

Performance and Risk

Despite its inclusion of oil companies, the FlexShares STOXX US ESG Select Index Fund has marginally outperformed the Russell 1000 since its inception in 2016. And get this, it has similar risk metrics. So even though you might be investing in companies with higher ESG scores, you’re not necessarily taking on more risk. That’s a win-win in my book!

How Does This Impact Me?

Now, you might be wondering, how does all of this ESG talk actually impact me as an investor? Well, let me tell you. By investing in funds like the FlexShares STOXX US ESG Select Index Fund, you’re not only potentially earning better returns, but you’re also supporting companies that are making a positive difference in the world. It’s like putting your money where your values are!

How Does This Impact the World?

On a larger scale, the rise of ESG investing is changing the way companies operate. More and more businesses are feeling the pressure to be environmentally conscious, socially responsible, and transparent in their governance. This shift towards sustainability is not only good for the planet, but it’s also good for society as a whole. And hey, if we can make a profit while doing good, why not?

Conclusion

So, there you have it. The FlexShares STOXX US ESG Select Index Fund may seem like just another investment option, but it’s so much more than that. It’s a way to support companies that are making a positive impact on the world, while potentially earning better returns for yourself. It’s a win-win situation that’s hard to pass up. So why not give ESG investing a try? You might just be pleasantly surprised by the results.