Discuss CFA Institute ESG-Investing Exam Topic 5 Question 28

Exclusionary screening:

Areduces portfolio tracking error and active share.

Bis the oldest and simplest approach within responsible investment.

Cemploys a given ESG rating methodology to identify companies with better ESG performance relative to its industry peers.

Suggested Answer: B

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21 comments · newest first

Earlean 4 days ago

I think B is the best choice. It's straightforward.

Lindy 10 days ago

I lean towards C. It's about improving ESG performance.

Truman 15 days ago

A reduces risk, but C shows a proactive approach.

Samuel 20 days ago

I feel B is too basic. We need more than just the oldest method.

Adela 25 days ago

C is interesting. ESG ratings are crucial for comparison.

Becky 1 month ago

I agree, but A seems important too. Tracking error matters.

Emilio 1 month ago

I think option B is the best choice. It's straightforward.

Lacresha 1 month ago

I think A) and C) are spot on, but B) feels a bit outdated.

Aleisha 2 months ago

Wait, are we really saying exclusionary screening is the best method?

Cathrine 2 months ago

C) Not sure about that, seems a bit simplistic.

Annita 2 months ago

B) Totally agree, it's been around forever!

Nickolas 2 months ago

A) is true, it helps keep things in line.

Demetra 2 months ago

Not sure about B, there are newer methods out there too.

Rachael 2 months ago

I agree with A, tracking error is key for active funds.

Earleen 3 months ago

C) Really? I thought ESG ratings were pretty subjective.

Lorriane 3 months ago

B) Definitely, it's been around forever!

Celeste 3 months ago

A) is true, it helps keep things aligned.

Lera 3 months ago

I think exclusionary screening might reduce active share, but I need to double-check how that relates to tracking error.

Angelica 3 months ago

I feel like option C sounds familiar because we talked about ESG ratings, but I'm not confident if that's the right choice here.

Nydia 3 months ago

I remember discussing how exclusionary screening is one of the oldest methods in responsible investing, but I can't recall the details.

Clay 5 months ago

I think exclusionary screening is more about avoiding certain companies, but I'm not sure how it affects tracking error.

CFA Institute ESG-Investing Exam - Topic 5 Question 28 Discussion