S&P Global Market Intelligence ($):

Some of the biggest investment funds set up with environmental, social and governance (ESG) criteria are outperforming the broader market during the coronavirus crisis.

S&P Global Market Intelligence analyzed 17 exchange-traded and mutual funds with more than $250 million in assets under management that select stocks for investment based in part on ESG criteria. Of those funds, 12 have lost less value so far this year than the S&P 500. The top performer in the analysis, the Brown Advisory Sustainable Growth Fund, had a negative 5.4% price change in the year through market close April 9, compared to a 13.7% decline in the S&P 500.

Critics of ESG investing often question whether the strategy can deliver premium returns. ESG fund managers said their focus on nontraditional risks led to portfolios of companies that so far have been resilient during the COVID-19 downturn.

“For us, sustainability is not an end in and of itself; it is a means by which we turn over more rocks, look at more information, and add a complementary lens in order to gain conviction on a company’s strategy, operations, and prospects for growth,” said Karina Funk, a portfolio manager at Brown Advisory Inc. and the firm’s head of sustainable investing, in an emailed statement.

Another sustainability-focused fund, Calvert Research & Management’s U.S. Large-Cap Core Responsible Index Fund, is down 12.1% this year. The fund held equity assets valued at about $1.9 billion as of April 9, according to S&P Global Market Intelligence.

On a call with reporters April 7, Calvert CEO John Streur attributed the firm’s relatively strong performance to its “very limited exposure to the entire fossil fuel value chain,” as well as investments in companies with historically strong ESG characteristics.

[Esther Whieldon, Michael Copley, Robert Clark]

More ($): Major ESG investment funds outperforming S&P 500 during COVID-19