Sample E-Newsletter for Financial Services Firms/Associates

This is a sample newsletter for Sprocket Accounting Associates, a fictional firm.

I wanted a topic that required research, so I chose to write about ESG – Environmental, Social, and Governance – and its influence on a client’s investing.

If you would like to discuss having a personal newsletter, please leave your contact information here. Thank you.

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ESG Can Boost Your ROI

There is an investment strategy that began in the 1960s that is more worthy of your attention today than ever before.

To make informed decisions regarding your portfolio’s performance, you need to consider all stimuli that will affect it, which is the focus of this month’s newsletter.

Non-financial factors – like climate change and social justice – have become highly significant in investment planning.

What is ESG and why is it important to me?

ESG stands for Environmental, Social, and Governance.

Environmental would take into account climate change, renewable energy, and a company’s carbon footprint, for instance.

Social considerations would include a company’s record on DEI (Diversity, Equity, and Inclusion), race, and gender.

Corporate governance deals with the structure of a business and whether it relates favorably or unfavorably to employees and shareholders.

Here are some statistics to consider: (Bankrate)

  • 88% of public companies have ESG initiatives in place.
  • About two-thirds of privately-owned companies have ESG initiatives in place.
  • 89% of investors consider ESG issues in some form as part of their investment approach.
  • 31% of European investors say ESG is central to their investment approach, compared with 18% of investors in North America.
  • Just 13% of global investors see ESG as a “passing fad that will eventually go out of fashion.”
  • Bank of America, NVIDIA and Microsoft took the top 3 spots in nonprofit research organization JUST Capital’s 2023 rankings based on ESG metrics.

It should be noted, however, that U.S. sustainable fund flows have been declining since the second quarter of 2021, after achieving significant gains until that time.

Here are some ESG funds you should know.

You may be familiar with the concept of ESG investing. Of late, they have become quite popular as well as controversial.

Congress recently passed a proposal that would prohibit 401(k) plans to include ESG funds. President Biden vetoed it.

Some have considered them to be “woke” investments, a term that is not universally admired.

That being said, Forbes ADVISOR claims the best ESG ETFs of October 2023 are:

  • Vanguard ESG U.S. Stock ETF (ESGV)
  • Pimco Enhanced Short Maturity Active ESG ETF (EMNT)
  • Nuveen ESG Dividend ETF (NUDV)
  • iShares MSCI Global Sustainable Developmental Goals ETF (SDG)

Forbes opinion of the best ESG Mutual Funds of October 2023 is:

  • Fidelity U.S. Sustainability Index Fund (FITLX)
  • Fidelity International Sustainability Index Fund (FNIDX)
  • Calvert US Mid Cap Core Responsible Index Fund (CMJAX)
  • BlackRock Sustainable Advantage CoreAlpha Bond Fund (BIAAX)

This is exactly how to capitalize on the ESG trend.

If you decide that ESG funds would be a good investment, here are the steps to choosing which fund(s) would be right for you. (Forbes)

  1. Define your ESG focus. For example, are environmental issues a concern? How about the CEO’s salary compared to the worker’s?
  2. Research ESG fund strategies. What qualifies a company to be included in the fund you’re considering? Or disqualifies it?
  3. Understand ESG criteria. There is no universal standard, so learn what metrics the fund uses and their data sources.
  4. Evaluate the fund’s track record. What is its past performance. While that is no indication of future performance, it’s important to look for growth.
  5. Consider fees and costs. ESG funds’ expense ratios tend to be on the high side which, over time, can erode returns.
  6. Seek out independent ratings and certifications. Check Morningstar, MSCI, or the United Nations-supported Principles for Responsible Investment (PRI) for the fund’s ESG investing record.

Please, make sure you do your research when choosing an ESG fund. If you’re unsure about choosing one, consult with one of our financial advisors at Sprocket Accounting Associates.

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