Yahoo Finance Video
According to a report from Morningstar, ESG (Environmental, Social, and Corporate Governance) funds faced their worst year on record in 2023, as investors pulled out $13 billion. The pullout of investments marks the fifth straight quarter of net outflows and more than offsets the positive flows seen in Europe, dragging down the market globally. Hennessy Funds Portfolio Manager of the Hennessy Stance ESG ETF (STNC) Bill Davis joins Yahoo Finance to discuss where ESG ETF investing stands and why he believes there are still some tailwinds that will help these funds bounce back. Davis lays out why the loss is only a minor setback: "The underlying dynamics that are causing companies to more ambitiously decarbonize, focus on better governance, do all of the things that make them attractive from an ESG standpoint really aren't going anywhere. And, in fact, I would say if anything, institutional investors especially are stepping up their efforts to encourage companies to be more transparent and more ambitious. And I think if anything what's happening is the companies are simply using the term ESG less. But I think that the savvy ones understand that there's big opportunity in here, that there's opportunity to grab market share from competitors if they can develop new products and services that meet the demands of the market." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Nicholas Jacobino
