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Sustainability Matters

Sustainable Investing in Fixed-Income Funds

The choices are expanding for investors wanting bond funds that incorporate ESG.

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A just-released study shows it can make as much sense to consider sustainability factors in a corporate-bond portfolio as it does in an equity portfolio. While fund investors have relatively few options to put that finding into effect today, more choices are on the horizon as bigger players get into the picture.

Researchers from the Quantitative Portfolio Strategy group at Barclays Research found that tilting corporate-bond portfolios toward companies with higher environmental, social, and governance scores resulted in a performance advantage over portfolios tilted toward companies with lower ESG scores.

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