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Sustainability Matters

Don't Get Thrown Off by Sustainable Fund Labels

Different terms like ESG, impact, or sustainable are unreliable guides to distinguishing among strategies.

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Neuberger Berman Socially Responsive changed its name to  Neuberger Berman Sustainable Equity (NBSLX) this month. Launched in 1994, the fund is one of the most successful SRI/ESG/sustainable funds ever, in my view. With $2.3 billion in current assets, plus more in other vehicles, the fund (Investor share class) has a 9.59% annualized 15-year return, net of fees, as of the end of April 2018, 4 basis points better per year than that of the S&P 500. No changes to the underlying strategy, just a name change and an update in the prospectus describing the fund’s approach:

"The Portfolio Managers employ a research driven and valuation sensitive approach to stock selection, with a focus on long term sustainability. This sustainable investment approach seeks to identify high quality, well-positioned companies with leadership that is focused on ESG as defined by best in class operating practices."

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