eToro Announces Diversified ESG Portfolio
The social investing network eToro has started a new portfolio called ESG-Leaders. This portfolio gives retail investors long-term access to companies that are setting the standard for best practices in environmental, social, and governance (ESG).
Dani Brinker, Head of Investment Portfolios at eToro, said:
"Our research shows that three in five (62%) retail investors sometimes or always consider ESG factors before investing. ESG insights can provide additional information about a company which is not usually accounted for in the traditional financial analysis, and growing evidence suggests that positive ESG performance can improve returns."
The portfolio is made up of the four companies that have some of the highest ESG scores for their sector across 11 industries. Market capitalisation, liquidity, and sell-side analyst ratings are also taken into account.
The 11 industry sectors covered are consumer discretionary, consumer staples, energy, financials, healthcare, industrials, information technology, materials, real estate, telecommunication services, and utilities. Some of the companies in the portfolio are Beiersdorf, which is the parent company of Nivea, ABB, Nvidia, and Telefonica. Click here to view the list.
"Environmental, social, and governance factors have different effects on companies based on the type of business they are in. For example, a company that works with energy will be more likely to face risks from the environment, while a company that works with money will be more likely to face governance risks. Constructing a portfolio of the top ESG leaders from 11 industry sectors offers a comprehensive, diversified portfolio that offers exposure to companies leaders in all three aspects of ESG.” added Dani Brinker.
The portfolio launch follows the addition of ESG scores for over 2,700 stocks to the eToro platform. The ESG scores are powered by ESG Book, a global leader in ESG data and technology. They combine the most recent market news, NGO signals, and company-reported information. This lets users think about environmental, social, and governance factors when building their portfolios.
eToro's Smart Portfolios provide investors with exposure to a variety of market themes. Smart Portfolios from eToro are long-term investments that offer diversified exposure without any management fees. They do this by putting together several assets according to a set method and investing passively.
Initial investment starts at USD 500, and investors can access tools and charts to track the portfolio’s performance, while eToro’s social feed will keep them up-to-date on developments in the sector. This portfolio is currently unavailable to users in the United States.