Posted on 12/16/2022 4:57:23 AM PST by MtnClimber
The White House has recently issued a regulation allowing investment fiduciaries, like 401(k) managers, to offer investment options “that consider environmental, social, and governance (ESG) issues, such as climate change and social justice initiatives,” Justin Haskins reports at Fox News.
“Some workers may not notice any changes to their 401(k) and other retirement options over the next year or two,” he continues, “but others will soon find themselves stuck choosing between a short list of ESG-focused investment funds.”
The Biden administration insisting that “good investment decisions should take climate change and other ESG factors into account” creates a massive ethical problem for the financial industry. A 401(k) manager would find incredible difficulty in both restricting plan participants to ESG offerings and acting as a fiduciary on participants’ behalf.
For a retirement plan fiduciary, which funds are available in the plan and which are excluded often comes down to two basic factors -- cost and performance. As most 401(k) investors would certainly prioritize lower costs and better performance over a high social credit score, the 401(k) manager, as a fiduciary, has a responsibility to seek lower cost fund options that provide greater potential for return on investment.
As an investment strategy, ESG fails on both fronts.
The first is the higher cost of funds employing the strategy. The cost of a mutual fund is often a function of the complexity of the fund’s management. This is why a large cap index fund which does little more than hold the stocks of companies in the S&P 500 will cost very little to the investor looking to track the index’s performance. An emerging market fund, which requires fund managers to relentlessly research and appraise the value of international stocks in lesser-developed nations for the greatest potential return, will often cost many times
(Excerpt) Read more at americanthinker.com ...
I predict that the only people getting rich will be the lawyers suing ESG funds.
Larry Fink needs to become very familiar with the inside of a 9x12 Supermax cell.
Don’t underestimate the willingness of liberals to get less rich - and pay higher fees - if they think by doing so they are saving the planet. P.T. Barnum would have invented ESG funds - if he had thought of them first.
ESG = Corporate Fiduciary Negligence
All should be held accountable.
Don’t underestimate the willingness of liberals to get less rich -
slight correction
dont underestimate the willingness of LEFTISTs to make you get less rich
Making investment decisions based on ESG scores is like getting legal advice from your auto mechanic.
Democrats plan to make ESG mandatory for any publicly traded company.
Anybody remember the
Looming Demise of Obamacare?
Either when it was first passed or when the REPUBLICAN PARTY took over control of the Senate, House and White House?
Didn’t think so.
ESG is an evil concept.
The problem with ESG is that those making such investments have no money
It is not an ethical problem for a fascist regime; by it's very construct, a fascist government picks the "winners" in the quasi-market place.
This is the mid-point of choking out the free enterprise system.
Most managed funds that most of us can buy don’t beat the index they are measured against.
Show me something different. Seriously, I can’t find any, let alone many.
A good old market crash and recession will quickly turn the DOL Swamp into “crusaders for 401(k) plan participants” and rake in fines and fees from BlackRock and others.
Once the graft dries up, of course.
I have not had managed funds for a long time. I can do much better myself. I just checked my 10-year average annual performance...32% vs 13% for the S&P 500.
I need to just turn things over to you.
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