Putting Social Minded Investing In Focus

June 18, 2015


Return 6.77% 5.48%
St Dev 15.87% 16.27%
10/9/07-3/9/09 -53.72% -56.67%


The bottom line appears to be that the more exclusionary process for DSI led to a significantly better return, standard deviation and drawdown as compared with the base benchmark (not even taking the 50 basis point expense ratio into effect).


Based on this analysis, it appears both of these ETFs accomplished their improved risk/return goals, just to varying degrees. KLD takes the more passive route and more closely tracks it base benchmark, while DSI takes a more active exclusionary approach. However, both provide the “peace of mind” to investors that they are supporting companies/industries objectively determined to be more responsible.


Additionally, both ETFs seem to be gaining some traction. Since the end of Q3 2014, both ETFs have seen shares outstanding grow by about 15 percent.



ESG investing has long been used in the institutional space. While other institutional-type strategies have flourished in ETF form, we may be on the precipice of ESG following suit.



At the time of writing, the author’s firm held no shares of any of the securities mentioned. The above constitutes the personal, professional opinion of Clayton Fresk, CFA, and does not reflect the views of Stadion Money Management LLC. References to specific securities or market indexes are not intended as specific investment advice.

Founded in 1993, Stadion Money Management is a privately owned money management firm based near Athens, Georgia. Via its unique approach and suite of nontraditional strategies with a defensive bias, Stadion seeks to help investors—through advisors or retirement plans—protect and grow their “serious money.” Contact Stadion at 800-222-7636 or www.stadionmoney.com.



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