There are many different kinds of investing, from value investing to a more technical approach. Nowadays, some firms use almost only algorithms in high-frequency trading to make profits. One interesting trend popping up in investing is that women prefer value investing. More specifically, the environment and social aspect of value investing. Around 52% of women would rather invest in companies that have a positive social or environmental impact according to a recent poll by Cerulli Associates. For men, that rate is only around 44%. How this is actually measured is difficult to say. Right now, value-based investing is measured with metrics (at least in terms of social impact) with ESG.
ESG, however, is a controversial metric that may not be as useful as people think. Even so, investors poured more than $70 billion into ESG equity funds, vastly exceeding recent annual flows. Looking forward, the interest in social impact investing will continue to rise.
What do you think about this trend and what could be a good replacement for the ESG metric?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.