Go woke, go broke – that seems to be the message from the latest 'Spot the Dog' report into underperforming investment funds. A quarter of the worst-performing funds in the UK are based on 'woke' investment practices, reckons the report by BestInvest.
The investment platform revealed funds with strategies in line with the environmental, social and governance (ESG) philosophy were among those who did particularly badly over the past three years. ESG encourages investment in firms deemed to be positive for the planet and society as well as promoting responsible practices.
As a result, the funds tend to avoid sectors such as oil and gas, mining and defence. Despite initial success, they have found themselves under pressure as spiralling energy bills and the invasion of Ukraine by Russia sparked renewed interest in what were previously considered 'unethical' investments.
Go woke, go broke: ESG encourages investment in firms deemed to be positive for the planet and society as well as promoting responsible practices. The revolt was recently highlighted by Charles Woodburn, boss of UK defence giant BAE Systems, who said investors who shunned defence have 'swung back to a more sensible position'.
The ESG fund performance was revealed as part of BestInvest's twice-yearly assessment of 'dog funds' – companies that have performed worse than their benchmark stock market index by at least 5 per cent for three years in a row. Savers' money held in the 137 funds on the list had shot up by 26 per cent to £67.4billion since the last survey was compiled in August.
