Key Takeaways
- • Goldman Sachs Asset Management launched the JUST ETF, tracking the JUST U.S. Large Cap Diversified Index (JULCD), created by JUST Capital—a nonprofit cofounded in 2013 by billionaire Paul Tudor Jones II to identify large U.S. companies demonstrating strong environmental, social, and governance (ESG) practices.
- • The JULCD index outperformed the Russell 1000 by 3.6 percentage points over the past 18 months, with top-quintile JUST-ranked companies showing 14% higher annualized returns and 7% lower volatility compared to bottom-quintile performers from December 2016 to December 2017.
- • JUST Capital surveyed 72,000 Americans to identify ESG priorities most relevant to investors, then scored Russell 1000 companies on 85 metrics including fair pay, job creation, customer privacy, and environmental impact; only companies performing above industry average on these metrics qualify for index inclusion.
- • Companies in the JULCD index are on average twice as likely to pay all employees a living wage compared to other Russell 1000 constituents, reflecting the fund's focus on "just business behavior" aligned with investor and public values.
- • Comparable ESG-focused funds demonstrate longer-term performance credibility: Parnassus Endeavor, a $5 billion ESG fund emphasizing worker treatment, returned 14% over the past decade versus 9% for the S&P 500.
Summary
Goldman Sachs Asset Management has entered the ESG investing space with the launch of JUST, an exchange-traded fund designed to track companies engaged in what JUST Capital terms "just business behavior." The fund represents a significant institutional push into values-aligned investing, leveraging research from JUST Capital, a nonprofit foundation cofounded in 2013 by legendary macro investor Paul Tudor Jones II alongside thought leaders including Deepak Chopra and Arianna Huffington.
The JUST U.S. Large Cap Diversified Index (JULCD), which the ETF tracks, is built on a proprietary ESG scoring methodology grounded in empirical consumer research. JUST Capital surveyed 72,000 Americans to determine which ESG practices matter most to investors and the general public, then used those priorities to evaluate Russell 1000 companies against 85 specific metrics spanning fair compensation, job creation, customer privacy protection, and environmental stewardship. Only companies that outperform their industry peers on these weighted metrics qualify for index inclusion, creating a filtered portfolio of large-cap firms aligned with stakeholder values.
Performance data supports the thesis that ESG compliance correlates with financial returns. Over the past 18 months, the JULCD has outperformed the Russell 1000 by 3.6 percentage points. More granularly, research by JUST Capital demonstrates that the top quintile of JUST-ranked companies delivered 14% higher annualized returns alongside 7% lower volatility than bottom-quintile performers during the December 2016–December 2017 period. Additionally, JULCD constituents are statistically twice as likely to pay all employees a living wage relative to the broader Russell 1000, suggesting tangible operational differentiation.
While 18 months represents a limited track record, longer-duration ESG strategies offer encouraging precedent. Parnassus Endeavor, a $5 billion fund specializing in worker treatment metrics, has generated 14% annualized returns over a decade compared to 9% for the S&P 500, suggesting that responsible investing frameworks can sustain outperformance across market cycles. The Goldman Sachs-JUST Capital partnership positions the JUST ETF to scale these principles across institutional capital flows.
The JUST U.S. Large Cap Diversified Index (JULCD), which the ETF tracks, is built on a proprietary ESG scoring methodology grounded in empirical consumer research. JUST Capital surveyed 72,000 Americans to determine which ESG practices matter most to investors and the general public, then used those priorities to evaluate Russell 1000 companies against 85 specific metrics spanning fair compensation, job creation, customer privacy protection, and environmental stewardship. Only companies that outperform their industry peers on these weighted metrics qualify for index inclusion, creating a filtered portfolio of large-cap firms aligned with stakeholder values.
Performance data supports the thesis that ESG compliance correlates with financial returns. Over the past 18 months, the JULCD has outperformed the Russell 1000 by 3.6 percentage points. More granularly, research by JUST Capital demonstrates that the top quintile of JUST-ranked companies delivered 14% higher annualized returns alongside 7% lower volatility than bottom-quintile performers during the December 2016–December 2017 period. Additionally, JULCD constituents are statistically twice as likely to pay all employees a living wage relative to the broader Russell 1000, suggesting tangible operational differentiation.
While 18 months represents a limited track record, longer-duration ESG strategies offer encouraging precedent. Parnassus Endeavor, a $5 billion fund specializing in worker treatment metrics, has generated 14% annualized returns over a decade compared to 9% for the S&P 500, suggesting that responsible investing frameworks can sustain outperformance across market cycles. The Goldman Sachs-JUST Capital partnership positions the JUST ETF to scale these principles across institutional capital flows.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.