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Sustainability Matters

Sustainability Matters: Sustainable Equity Funds Turn In Another Strong Quarter

Of ESG index funds, 25 of 26 have outperformed for the year to date.

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Sustainable equity funds maintained their strong 2020 performance in the third quarter. Stocks continued to rebound during the first two months of the quarter before falling in September amid concerns over increasing coronavirus cases and uncertainty ahead of the U.S. election. Despite a 3.6% decline in September, the Morningstar US Market Index gained 9.2% for the quarter. Stocks outside the United States didn’t fare as well. The Morningstar Developed ex-US Market Index gained 5.8% for the quarter.  

As was the case in the first two quarters of 2020, a large majority of sustainable equity funds finished in the top halves of their Morningstar Categories for the third quarter. Sixteen of 26 ESG-focused index funds outperformed conventional index funds that cover the same parts of the market.

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Jon Hale does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.