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Sustainable investment funds: Keys to Economic Recovery?

| Wednesday November 5th, 2008 | 0 Comments

sustainableinvesting-earthscan.jpg More than $5 trillion has been invested in what the authors of new Earthscan book dub “sustainable investing strategies,” capital that could jumpstart and put economies on the path to recovery.
According to authors Cary Krosinsky and Nick Robins, sustainable investing funds make up as much as one-quarter of public equities, as well as corporate and government bonds, encompass aspects of the “sustainability agenda.” “This money, focused on the long-term opportunities arising from environmental and social imperatives, could help finance a resurgent and more resilient global economy,” according to an Earthscan promo for their book, entitled, “Sustainable Investing”.
Krosinsky’s research shows that in addition to its focus on long-term performance and sustainability, investments in sustainability also produce better-than-average returns. Sustainable investment funds outperformed mainstream indices between December 2002 and December 2007, according to Krosinsky’s latest research, returning an average 18.7% per year, better than the MSCI World Index, S&P 500 and the FTSE 100.
The authors note that the Winslow Green Growth Fund outperformed Warren Buffett’s Berkshire Hathaway, recording 200% growth compared to the Buffett holding company’s 100% during this period.
It should be noted that these figures need to be updated now that the latest, money fed asset bubble has deflated, or is at least in the process of deflating. As a result, Winslow’s Green Growth Fund has lost 57.84% over the past year, and produced annualized returns of -15.61% and -5.94% over the past three and five years, respectively. Berkshire Hathaway’s A shares are down nearly 12% the past year. but up nearly 51% over five.
Also, I’d be interested to find out how Krosinsky and Robin define “sustainable investment funds.” Guess I’ll have to buy the book.


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