Amid ESG Fund Proliferation, Advisors Must Be Mindful of Fit

Posted by Dana Funds Investment Team on Jul 9, 2020 11:12:14 AM

ESG interest is growing and as asset flows follow, so too are the number of strategies dedicated to the space. For investment advisors, that makes the job of matching client objectives with the right strategy increasingly difficult.

In a recent Q&A session, Dana portfolio managers touched on the issue, and where their own ESG fund may – or may not – fit within a portfolio. A brief excerpt from the interview explains:

“Our strategy is designed to be a core holding within a client’s equity portfolio. The fund is sector neutral relative to its benchmark, spans the market cap spectrum for opportunities, and invests in both value and growth stocks. The broader exposure ensures the end investor is still getting the market-like returns they depend on from their equity allocation. We believe niche ESG funds, or ones that load up on a particular ESG-friendly sector, such as technology, run the risk of producing returns that can deviate significantly from broader equity indices.

“We also believe our work integrating ESG into the investment process is a differentiator. We don’t just screen out companies that have poor ESG ratings. Instead, we contract with numerous  different vendors for ESG research and have an in-house analyst specializing in ESG issues. We also actively engage companies around material ESG issues, spurring the positive changes we believe ESG investors seek to make in society.”

To learn more about Dana’s unique investment process, including the ways we incorporate ESG principles into all of our investment strategies, download the full Q&A from our portfolio managers.


New call-to-action


The Dana Funds are distributed by Ultimus Fund Distributors, LLC. There is no affiliation between Ultimus Fund Distributors, LLC. and the firms referenced in this blog post.