The conversation between human and AI assistant.
Why do socially responsible portfolios have a small-cap bias?
That makes sense. Are there any drawbacks to investing in small-cap companies for a social responsible portfolio?
Yes, there can be drawbacks. Small-cap companies can be riskier investments since they often have less financial stability and may struggle to compete with larger competitors. Additionally, small-cap companies may have a harder time implementing ESG policies or may prioritize profitability over social responsibility. It is important for investors to research the ESG rating and track record of any companies they are considering investing in.