If you’re an investor who wants to incorporate environmental, social, and governance (ESG) data into your portfolio but don’t know where to start, the process can seem quite daunting.
Do you look at companies with low carbon footprints? Do you look for blue chip stocks that have high governance scores? How do you come to terms with companies that have good environmental impacts, but poor social performance?
These can be hard questions for investors just trying to get their feet wet with ESG, but luckily, there are some tools available to help tackle this.
Exchange-traded funds (or ETFs) are securities that can be traded like stocks, but give investors exposure to a number of assets packaged together. They may offer investors more convenience than picking individual stocks. For example, investors may choose to invest in an index-tracking ETF if they want their portfolio to perform like the rest of the market.
Likewise, investors who want exposure to ESG can look for ETFs that are specifically designed to incorporate ESG principles. Now, there are many different ways ETFs can incorporate ESG—whether that means tracking an ESG-friendly industry, or companies that have higher ESG performance than their peers—but for investors who want exposure to ESG in their portfolio, getting familiar with some ESG ETFs could be a place to start.
Fennel gives investors access to thousands of US publicly listed stocks and ETFs, including ESG ETFs. So if you have a Fennel account, here are 20 ESG ETFs you should be familiar with.
Note: This should not be seen as an endorsement or recommendation to buy or sell any of these ETFs. This is just a list of some of the ESG ETFs available on the Fennel platform at the time of this writing.
1. Vanguard ESG U.S. Stock ETF
ESGV tracks a market-cap-weighted index of US all-cap companies screened for environmental, social, and corporate governance (ESG) criteria.
∙ Ticker: ESGV
∙ Expense ratio: 0.09%
∙ # of holdings: 1,481
2. iShares ESG Aware MSCI USA ETF
ESGU tracks an index composed of US companies that are selected and weighted for positive environmental, social, and governance (ESG) characteristics,
∙ Ticker: ESGU
∙ Expense ratio: 0.15%
∙ # of holdings: 302
3. iShares ESG Aware MSCI EM ETF
ESGE tracks an index of large- and mid-cap companies from emerging market economies. Stocks are selected and weighted for positive environmental, social, and governance characteristics while maintaining similar investment risk/return of the market.
∙ Ticker: ESGE
∙ Expense ratio: 0.25%
∙ # of holdings: 302
4. iShares ESG Aware US Aggregate Bond ETF
ESGG tracks a market-value-weighted index of US dollar-denominated bonds from issuers evaluated for favorable ESG practices.
∙ Ticker: ESGG
∙ Expense ratio: 0.2%
∙ # of holdings: 410
5. Xtrackers MSCI USA ESG Leaders Equity ETF
USSG tracks a market cap-weighted index of US large- and mid-cap stocks, screened for environmental, social, and governance characteristics.
∙ Ticker: USSG
∙ Expense ratio: 0.1%
∙ # of holdings: 297
6. iShares Global Clean Energy ETF
ICLN tracks a tiered index of global companies involved in clean energy businesses.
∙ Ticker: ICLN
∙ Expense ratio: 0.4%
∙ # of holdings: 101
7. SPDR S&P 500 Fossil Fuel Reserves Free ETF
SPYX follows an S&P 500- based index excluding companies with known fossil fuel reserves.
∙ Ticker: SPYX
∙ Expense ratio: 0.2%
∙ # of holdings: 492
8. Invesco Solar ETF
TAN tracks an index of global solar energy companies selected based on the revenue generated from solar related business.
∙ Ticker: TAN
∙ Expense ratio: 0.69%
∙ # of holdings: 45
9. First Trust Nasdaq Clean Edge Green Energy Index Fund
QCLN tracks a market-cap-weighted index of US-listed firms involved in clean energy.
∙ Ticker: QCLN
∙ Expense ratio: 0.58%
∙ # of holdings: 63
10. iShares ESG Aware USD Corporate Bond ETF
SUSC tracks an index of USD-denominated, investment-grade corporate debt, selected based on positive ESG characteristics. Holdings are optimally weighted to provide a similar risk and return characteristics of the Bloomberg US Corporate Index.
∙ Ticker: SUSC
∙ Expense ratio: 0.18%
∙ # of holdings: 3,813
11. iShares ESG Aware 1-5 Year USD Corporate Bond ETF
SUSB tracks an index of USD-denominated, investment-grade, short-term corporate debt, selected based on positive ESG characteristics. Holdings are optimally weighted to provide a similar risk and return of the Bloomberg US Corporate 1-5 years Index.
∙ Ticker: SUSB
∙ Expense ratio: 0.12%
∙ # of holdings: 1,311
12. iShares MSCI USA ESG Select ETF
SUSA tracks an index of US companies with high environmental, social and governance (ESG) factor scores as calculated by MSCI.
∙ Ticker: SUSA
∙ Expense ratio: 0.25%
∙ # of holdings: 186
13. iShares ESG MSCI USA Leaders ETF
SUSL tracks an index of US large- and mid-cap firms with the highest ESG ratings, weighted by market-cap within each sector bucket.
∙ Ticker: SUSL
∙ Expense ratio: 0.1%
∙ # of holdings: 298
14. iShares ESG Aware MSCI EAFE ETF
ESGD tracks an index of developed market international companies that have been selected and weighted for positive environmental, social, and governance characteristics.
∙ Ticker: ESGD
∙ Expense ratio: 0.2%
∙ # of holdings: 410
15. Invesco WilderHill Clean Energy ETF
PBW tracks a modified equal-weighted index of companies involved in cleaner energy sources or energy conservation.
∙ Ticker: PBW
∙ Expense ratio: 0.61%
∙ # of holdings: 75
16. iShares MSCI KLD 400 Social ETF
DSI tracks a market cap weighted index of 400 US companies deemed to have positive environmental, social, and governance characteristics by MSCI.
∙ Ticker: DSI
∙ Expense ratio: 0.25%
∙ # of holdings: 405
17. iShares ESG MSCI EM Leaders ETF
LDEM tracks a tier-weighted index composed of large- and mid-cap emerging-market stocks with high environmental, social, and governance traits relative to their sector peers..
∙ Ticker: LDEM
∙ Expense ratio: 0.16%
∙ # of holdings: 481
18. First Trust Global Wind Energy ETF
FAN tracks an index of companies involved in the wind energy industry, weighted according to float adjusted market cap with strict limits on individual holdings.
∙ Ticker: FAN
∙ Expense ratio: 0.6%
∙ # of holdings: 57
19. Nuveen ESG Small-Cap ETF
NUSC tracks a multi-factor-weighted index of small-cap companies listed on US exchanges. Holdings are screened for environmental, social, and governance (ESG) criteria..
∙ Ticker: NUSC
∙ Expense ratio: 0.31%
∙ # of holdings: 532
20. Nuveen ESG Large-Cap Value ETF
NULV tracks an index of US large-cap value stocks that score highly on environmental, social, and governance (ESG) criteria. The fund is weighted using a multi-factor optimizer.
∙ Ticker: NULV
∙ Expense ratio: 0.26%
∙ # of holdings: 97
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The views expressed are those of the author at the time of writing, are not necessarily those of the firm as a whole and may be subject to change. The information contained in this advertisement is for informational purposes and should not be regarded as an offer to sell or a solicitation of an offer to buy any. It does not constitute a recommendation or consider the particular investment objectives, financial conditions, or needs of specific investors. Investing involves risk, including the loss of principal. Past performance is not indicative or a guarantee of future performance. We do not provide tax, accounting, or legal advice to our clients, and all investors are advised to consult with their tax, accounting, or legal advisers regarding any potential investment. The information and any opinions contained in this advertisement have been obtained from sources that we consider reliable, but we do not represent such information and opinions are accurate or complete, and thus should not be relied upon as such. This is particularly true during periods of rapidly changing market conditions. Securities offered through Fennel Financials, LLC. Member FINRA SIPC.