Just like regular investment funds can either be actively managed or “closet indexers” who mostly track the index, ESG funds can either have active idiosyncratic views about what companies are good for ESG, or can just track published benchmarks. If you just track the benchmarks then you will, in a certain light, have better ESG performance, because the benchmarks are the ESG performance . But that might not be quite what one wants in an ESG manager.

Money Stuff: AMC Has Some Clever APEs by Matt Levine ✉️