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ETF Specialist


Investor demographics are slowly turning in favor of the pairing of impact-oriented strategies and the exchange-traded fund chassis, and investors' need for relevant analytics is growing as a result.

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A version of this article was published in the May 2016 issue of Morningstar ETFInvestor. Download a complimentary copy of ETFInvestor here.

Sustainable investing appears to be making its way into the mainstream. Much like other rapidly evolving corners of the market (the other example nearest and dearest to our hearts would be strategic beta), the category is suffering from a bit of an identity crisis. What should we call it? How should we define it? And most important of all, how can we capture and measure environmental, social, and governance, or ESG, as well as other impact-related criteria, and incorporate them into our investment process? Earlier this year, Morningstar stepped into this breach as we introduced the Morningstar Sustainability Rating for funds, with the goal of helping investors to make better-informed decisions and invest in ways that are meaningful to them. (Jon Hale, Morningstar's head of sustainability research, shares our own definition and details the rationale behind our undertaking in this arena in "The Appeal of Sustainable Investing.")

Ben Johnson has a position in the following securities mentioned above: VOO. Find out about Morningstar’s editorial policies.