Sustainable Outperformance

May 1, 2012

Sustainable indexes in LatAm continue to outperform benchmarks. A rising number of regional companies with strong practices gives index makers more names to choose from.

With uncertainty in global equity markets, and with large industrial country economies struggling and Asia showing signs of slowing down, investors continue to find that companies investing in sustainability deliver superior performance, especially in Latin America.

As of April, the M&E LatinFinance Sustainability Stars Index had returned 23% in the 28 months since its creation, compared to a 7.9% loss in the Bovespa during that period. The Bovespa’s own indexes highlighting corporate governance also outperformed during that period, including the Bovespa Governance Index IGC (12.3% return), Bovespa IGCT Governance Index (9.4%) and the Bovespa ITAG special tag-along index , which tracks shares that offer exceptional conditions for minority shareholders (11.6%).

"A way you can quantify [the importance of corporate governance] is to look at the relative performance of the Novo Mercado in...

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