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Rising fears of a bubble in responsible equities

Huge inflows into ESG funds are driving up prices for equities with green credentials.

Photo: Jan Dagø/JPA

US companies with top ESG rankings now trade at a 30 percent premium compared to the poorest performers as measured by their forward price-to-earnings ratios, reports the Financial Times quoting Savita Subramanian, head of US equity strategy at Bank of America.

"This is not just a function of growth stocks doing better than value stocks," Savita Subramanian said describing the dichotomy in US markets as "monstrous".

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