Market Extra: ‘Sustainable’ funds outperformed the broad market in the recent correction

Being green may have prevented some red for U.S. stock investors in the recent downturn.

So-called sustainable funds—which tilt an equity portfolio toward companies with high scores on environment, social and corporate governance (ESG) issues—tended to perform better in the equity-market volatility seen earlier this month, according to a Morningstar analysis.

While the funds fell alongside the broader market, a tumble that took both the Dow DJIA, +0.80% and the S&P 500 SPX, +0.81% into correction territory, the losses were in many cases less severe.

In the first nine days of the month—a period over which the S&P fell 7.2%—two-thirds of all sustainable funds available in the U.S.

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