Scottsdale Wealth Planning

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Beyond the Label, ESG Funds May Miss Their Mark

KEY TAKEAWAYS
  • Components of ESG in an investment strategy, how they’re measured, and the method of incorporation can lead to a wide range of investment outcomes.
  • ESG strategies exhibit a broad spectrum of characteristics, which may drive expected returns that differ from the market.
  • Greenhouse gas emissions exposure has varied substantially across ESG strategies, highlighting the importance of looking beyond ESG labels to determine whether an ESG investment is consistent with one’s goals.

Read recent research by Dimensional Funds in their article, “‘Beyond the Label, ESG Funds May Miss Their Mark,” HERE.

Many people want to align their environmental views with their portfolio objectives. Dimensional’s sustainability strategies are designed to target measurable sustainability goals while seeking broad diversification, efficient cost management, and higher expected returns.

A Science-Based Approach to Sustainability Investing. Read about Dimensional’s Approach HERE.

DISCLOSURES

The information in this document is provided in good faith without any warranty and is intended for the recipient’s background information only. It does not constitute investment advice, recommendation, or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Unauthorized copying, reproducing, duplicating, or transmitting of this document are strictly prohibited. Dimensional accepts no responsibility for loss arising from the use of the information contained herein.

“Dimensional” refers to the Dimensional separate but affiliated entities generally, rather than to one particular entity. These entities are Dimensional Fund Advisors LP, Dimensional Fund Advisors Ltd., Dimensional Ireland Limited, DFA Australia Limited, Dimensional Fund Advisors Canada ULC, Dimensional Fund Advisors Pte. Ltd., Dimensional Japan Ltd., and Dimensional Hong Kong Limited. Dimensional Hong Kong Limited is licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) regulated activities only and does not provide asset management services.

Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Indices are not available for direct investment. 

UNITED STATES: Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Investment products: • Not FDIC Insured • Not Bank Guaranteed • May Lose Value
Dimensional Fund Advisors does not have any bank affiliates.

RISKS
Investments involve risks. The investment return and principal value of an investment may fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original value. Past performance is not a guarantee of future results. There is no guarantee strategies will be successful. Diversification neither assures a profit nor guarantees against loss in a declining market.

Sustainability funds use environmental and social screens that may limit investment opportunities for the fund.

Note: Paul Ohanian, CFP®, Scottsdale Wealth Planning, Inc., ("Advisor") is a registered investment advisor. Information contained in this website is for informational purposes only and should not be considered investment advice. Advice may only be provided after entering into an advisory agreement with Advisor. Information is at a period in time and subject to change. Our current Disclosure Brochure is set forth on Form ADV Part 2 and is available for your review upon request.