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ESG is just giving up returns for a good feeling, isn't it? Stock picking is just folly for individual investors, isn't it? Anyone claiming they can consisten

• irldexter 6mo ago
  On ESG/SRI: fair, excluding sectors comes at a cost, and we make that trade-off knowingly. On stock picking: the system is rules-based and mechanical, not discretionary. The "folly" argument applies most strongly to human judgment calls, which this attempts to remove. I literally wanted to reduce bias and get a better vantage point. On beating the index: 14 years of backtested data with walk-forward validation suggest it's possible for this specific strategy. Whether it holds going forward, nobody knows. We publish the ten best and worst precisely because we're not claiming certainty.
• lordgrenville 6mo ago
  As Matt Levine often points out, there are two possible cases for ESG 1/ This will bring worse returns, but I'm willing to accept the loss in order to forward values I support 2/ This will bring better returns, since the market underrates risks from bad ESG companies (e.g. the long-term return on capital for coal companies will be worse than the market expects) People marketing ESG funds (or anti-ESG, same rule applies) usually emphasise the second. > Anyone claiming they can consistently beat any large index is just delusional, aren't they? This is obviously not true. RenTech would like a word.