A popular group of stocks may be misleading investors.
According to S&P Global’s Mona Naqvi, Environmental, Social and Governance (ESG) ETFs lack clarity, so investors don’t always know where their money is going.
“A lot of different folks have different opinions and interpretations,” the firm’s global head of ESG capital markets strategy told CNBC’s “ETF Edge” on Monday. “We need more clarity and transparency into precisely what a fund or ETF is claiming to do.”
ESG funds, which include stocks from green energy to waste management, are attracting big money. Morningstar reports net new assets into ESG funds soared to $51.1 billion in 2020.
To create a more generalized definition for ESGs,…