Good question! I haven’t seriously thought about this issue, but this is my first impression:
Shareholder activism seems more likely to be effective than divestment.
There probably aren’t any shareholder activism mutual funds/ETFs that focus on causes that EAs tend to prefer.
If you’re wealthy enough to conduct shareholder activism on your own, then doing so might be a better idea than investing in index funds. It seems likely that you can persuade a company to do $1 of good by giving up less than $1 in risk-adjusted return. I suspect this is true mainly because companies are generally willing to make very large dollar-value changes on the basis of relatively small activist efforts.
Good question! I haven’t seriously thought about this issue, but this is my first impression:
Shareholder activism seems more likely to be effective than divestment.
There probably aren’t any shareholder activism mutual funds/ETFs that focus on causes that EAs tend to prefer.
If you’re wealthy enough to conduct shareholder activism on your own, then doing so might be a better idea than investing in index funds. It seems likely that you can persuade a company to do $1 of good by giving up less than $1 in risk-adjusted return. I suspect this is true mainly because companies are generally willing to make very large dollar-value changes on the basis of relatively small activist efforts.