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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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
-
Dow Climbs 559 Points to Hit a New High: Stock Market TodayThe rotation out of tech stocks resumed Tuesday, with buying seen in more defensive corners of the market.
-
Are You Saving Too Much for Retirement? Know These Surprising DownsidesYour money may be better served outside of a retirement account.
-
Worried About an AI Bubble? Here’s What You Need to KnowThe Kiplinger Letter With the introduction of OpenAI’s new AI social media app, Sora, the internet is about to be flooded with startling AI-generated videos.
-
3 Major Changes Investors Must Prepare for in 2026A possible stock market bubble. Trump accounts. Tokenized stocks. These are just three developments investors need to be aware of in the coming months.
-
Will AI Videos Disrupt Social Media?The Kiplinger Letter With the introduction of OpenAI’s new AI social media app, Sora, the internet is about to be flooded with startling AI-generated videos.
-
What Services Are Open During the Government Shutdown?The Kiplinger Letter As the shutdown drags on, many basic federal services will increasingly be affected.
-
The Economy on a Knife's EdgeThe Letter GDP is growing, but employers have all but stopped hiring as they watch how the trade war plays out.
-
Banks Are Sounding the Alarm About StablecoinsThe Kiplinger Letter The banking industry says stablecoins could have a negative impact on lending.
-
Government Shutdown Puts IPO Resurgence at RiskThe IPO market has been sizzling in recent months, but the government shutdown threatens to put a short-term halt to public offerings. Here's why.
-
Apple Readies for AI Upgrade with New iPhonesThe Kiplinger Letter The tech giant has stumbled when it comes to artificial intelligence, but a new batch of iPhones will help it make headway.
