The conversation between human and AI assistant.
Why do socially responsible portfolios have a small-cap bias?
Can you explain to me why socially responsible portfolios tend to have a small-cap bias?
Sure, socially responsible portfolios often focus on investing in companies that have a positive impact on society and the environment. Small-cap companies tend to be less well-known and have less coverage from analysts, which can make it easier for them to fly under the radar with irresponsible practices. By investing in small-cap companies with strong environmental, social, and governance (ESG) ratings, investors can potentially have a positive impact and encourage responsible practices among these firms.