What is social investing? Latest quant models suggest social investing is becoming a key risk-adjusted return driver; sustainable portfolios showed Sharpe ratios 0.3 points above non-ESG peers over six months. A balanced approach is key: mix higher-return equities with safer assets like bonds. A common guideline is subtracting your age from 110 to determine your equity allocation. For example, at 66, you might invest 44% in stocks and 56% in bonds. Key drivers of the outperformance include sustainable funds’ greater allocations to global and European regions, reversing the 2H 2024 dynamic, in which weak returns in those regions led to underperformance. What is social investing? Portfolio rebalancing trends point to an uptick in socially targeted mid-cap equities, with turnover in these names up 18% in June compared to Q1 averages.
