Why are ESG-oriented ETFs going away?
Published On Nov 27, 2024, 8:37 AM
The article discusses the recent decline in popularity of ESG (Environmental, Social, and Governance) investment funds, which were previously gaining traction. Amid political and regulatory challenges, many firms are rebranding or closing these funds, particularly after concerns about greenwashing and the unsatisfactory performance of some investments. Regulatory scrutiny has increased, leading to the closure of over 20 ESG ETFs in 2024 alone. Major investors are withdrawing significant funds, as shown by Texas pulling $8.5 billion from BlackRock, highlighting the downturn in ESG-focused investments as investors seek more traditional returns.
Stock Forecasts
XLE
Positive
Due to the ongoing backlash against ESG investing and the significant outflows from ESG funds, traditional energy and conservative investment strategies may benefit from this shift. Companies involved in fossil fuels and industries with high returns and lower ESG standards might see a positive market reaction as more investors pivot away from ESG mandates.
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