30 January 2017
Madrid Headquarters
The finance chair at the Deusto Business School, Fernando Gómez-Bezares, presented a study at the school’s head offices in Madrid in which he concluded that socially-responsible investment (SRI) funds, which use environmental, social and governance (ESG) criteria, are better in terms of portfolio synchronisation and market entry and exit, and also in terms of selecting securities. Moreover, he assured those present that the SRI funds create more value in the long term than conventional ones and have a proven track record in Spain, where investment in them currently amounts to 150,000 million Euros.
These were some of the conclusions drawn from the study “Conventional Funds vs. Environmental, Social and Governance Funds: why may the latter be better” which was presented alongside Spainsif (Spanish Socially Responsible Investment Fund).
Gómez-Bezares explained that the study draws the conclusion that ethical fund managers obtain better yields than those of conventional ones because they know the products in which they invest better and do so in companies which are administered using ESG criteria and, therefore, are less exposed to risk.
The finance chair at the Deusto Business School, who was accompanied by the President of Spainsif, Jaime Silos, described in detail that his analysis of the capacity for selection and synchronisation and of anticipating the fund manager market shows that ESG investment funds are “clearly better” than conventional ones. “ESG managers evidence significantly better results with regard to synchronisation because generally speaking, the funds are smaller and this makes it easier for them to move their investments, thus anticipating market events”, he explained.
As regards the capacity for selection, ESG funds are “the same or slightly better” than conventional ones because they “know their investment group better” as they are “more specific”, Gómez-Bezares added.
Along the same lines, Gómez-Bezares, maintained that sustainable companies “are more profitable and face fewer risks in the long term".
For his part, Jaime Silos, recalled that over 75% of portfolios administered using ESG criteria are done so by institutional managers, although it is expected that private investors will invest more in these types of fund in the coming years.
