To help you understand what is going on with regulation of the finance and investing sectors and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…
Financial regulators are cracking down on misleading fund names. The Securities and Exchange Commission (SEC) recently adopted rules to prevent, among other things, misleading or deceptive claims by funds that use ESG factors — short for environmental, social and governance — when making investments. Per the SEC, a "fund’s name is an important marketing tool and can have a significant impact on investors’ decisions when selecting investments."
The rules come amid mounting concerns that some funds have misled shareholders over what’s in their holdings, a practice known as 'greenwashing' in order to cash in on the popularity of ESG investment strategies, a $2.8 trillion asset class now.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The rules broaden existing requirements governing fund names. Under a 2002 rule, if a fund name suggests a focus on certain asset classes or regions, it must invest at least 80 percent of its holdings in such assets. Since then, the size of assets in funds has grown from $7.2 trillion to $28.2 trillion, and fund names have morphed to reflect so-called thematic strategies.
The new SEC rule extends the 80 percent requirement to descriptive language in many fund names, such as growth, value and ESG, but funds can still come up with their own definition for ESG. So, some critics say the SEC rules will do little to curtail greenwashing by unscrupulous managers.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.
Related Content
-
-
75% of Holiday Travelers Are Cutting Back. Are You?
Over 75% of holiday travelers are adjusting their plans for Thanksgiving, Hanukkah, Christmas and New Year's, due to inflation and pricing pressures, Bankrate survey shows.
-
How to Save Yourself and Your 401(k) From Rising Taxes
Taxes will go up if provisions in the Tax Cuts and Jobs Act are allowed to sunset, but there’s still time to lock in lower taxes on your 401(k) savings.
-
The Era of Super-Low Interest Rates Could Be Over: The Kiplinger Letter
The Kiplinger Letter We’re likely never going back to the historically low rates that prevailed in late 2019 and early 2020.
-
Work Email Phishing Scams on the Rise: The Kiplinger Letter
The Kiplinger Letter Phishing scam emails continue to plague companies despite utilizing powerful email security tools.
-
Rental Market Will Slow Through 2023: The Kiplinger Letter
The Kiplinger Letter Expected growth in the rental market is likely to remain slow for the rest of the year amid a slow housing market and cooling economy.
-
Tech Giants Look to Curb AI's Energy Demands: The Kiplinger Letter
The Kiplinger Letter The expansion in AI is pushing tech giants to explore new ways to reduce energy use, while also providing energy transparency.
-
Passport Processing Times Speed Up: The Kiplinger Letter
The Kiplinger Letter The State Department credits an increase in staff and new technology with shrinking processing times.
-
New Employment Guidance Proposed on Hostile Work Practices: The Kiplinger Letter
The Kiplinger Letter New guidelines for employers fueled by a sharp increase in employment discrimination lawsuits in 2023.
-
As Tensions Rise, U.S. Imports From China Shrink: The Kiplinger Letter
The Kiplinger Letter China now accounts for less than 13.5% of American imports from abroad.
-
15 Cancer Drugs Are in Short Supply, FDA reports: The Kiplinger Letter
The Kiplinger Letter The U.S. is working to address cancer drug shortages caused by manufacturing and supply chain woes.
