theglobeandmail.com
Top-Performing Canadian Sustainable ETFs
This analysis identifies 114 Canadian-listed sustainable ETFs, further screening them to highlight those with five-star Morningstar Ratings and gold, silver, or bronze Morningstar Medalist ratings, indicating past outperformance and future potential.
- What criteria were used to select these high-performing sustainable ETFs?
- Selection was based on two criteria: A five-star Morningstar Rating for Funds, signifying historical outperformance relative to peers on a risk-adjusted basis after fees; and a Morningstar Medalist rating (gold, silver, or bronze), indicating the ETF's potential for future outperformance based on manager expertise, process robustness, and fund company stewardship.
- What considerations should investors keep in mind when evaluating these ETFs?
- Investors should carefully consider the asset class and category of each ETF, as Morningstar ratings are relative to category peers. The article does not provide financial advice, and independent research is recommended before any investment decisions. The table accompanying the article provides additional data points, including Morningstar's ESG risk rating (one to five globes).
- What Canadian sustainable ETFs have demonstrated superior performance and show promise for continued success?
- The analysis identified Canadian sustainable ETFs that received five-star Morningstar Ratings (for past risk-adjusted outperformance) and gold, silver, or bronze Morningstar Medalist ratings (indicating potential for future outperformance). These ETFs employ various sustainability approaches, including negative screening, best-in-class selection, and impact investing. Specific ETF tickers and details are provided in the accompanying table.
Cognitive Concepts
Framing Bias
The article presents a positive outlook on sustainable ETFs, highlighting their potential for returns and positive impact. The framing focuses on the opportunities presented by ESG investing and the potential for outperformance, which might unintentionally downplay potential risks or limitations.
Language Bias
The language used is generally neutral, but phrases like "fresh notebooks, crisp mornings" and "spirit of renewal" create a somewhat optimistic and encouraging tone. The description of ESG investing as offering a way to "pursue returns while acknowledging that capital can play a role in shaping a more sustainable path forward" is subtly persuasive.
Bias by Omission
The article omits discussion of the potential downsides or controversies associated with sustainable investing, such as greenwashing or the complexities of measuring ESG performance. It also doesn't detail the specific methodologies used by each ETF to achieve its sustainability goals. The lack of information on the potential for underperformance compared to traditional ETFs is a notable omission.
False Dichotomy
The article implies a simple choice between traditional and sustainable investing, potentially overlooking other investment approaches or strategies. The focus on outperforming peers could create a false impression that sustainable investing always leads to superior returns.
Sustainable Development Goals
The article focuses on sustainable ETFs, which directly support responsible investment practices and promote sustainable business models. By investing in companies with strong ESG profiles, these ETFs encourage responsible consumption and production patterns across various sectors. The selection criteria, including Morningstar ratings, further emphasizes the commitment to financially sound and sustainable businesses.