Although sustainable investment options are becoming more important to investors, many are convinced that sustainability and financial returns imply a tradeoff.
A study released Tuesday by the Morgan Stanley Institute for Sustainable Investing addressed this notion head-on—with some positive findings.
According to the report, investing in sustainability has usually met and often exceeded the performance of comparable traditional investments, on both an absolute and a risk-adjusted basis, across asset classes and over time.
Morgan Stanley reported last month that healthy majorities of respondents in a survey were interested in sustainable investing and expected it to become more prevalent by the end of the current decade.
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At the same time, a slight majority of those investors expected to give up some performance.
For its new report, Morgan Stanley reviewed 10,228 open-end mutual funds and 2,874 separately managed accounts over the last seven years.
The review found that sustainable equity mutual funds met or exceeded the median return of traditional equity funds for 64% of the time periods examined.