ESG investing has risen in popularity in recent years, with equity ESG ETFs' fund size surging more than six-fold in the last two years. As global temperatures continue to rise, investors are favouring companies that are doing their part to tackle climate change.
Since the start of the Covid-19 pandemic, an S&P Global Market Intelligence analysis found that majority of ESG ETFs and mutual funds with more than USD250m in AUM outperformed the S&P 500. But with no industry-wide consensus on what is the right way to integrate ESG factors in an investment portfolio, we believe the best way to gain exposure to this is via ETFs that are benchmarked to MSCI – one of the largest providers of ESG indices.
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Simply click on the ETF name above for direct access to our online equity trading platform / funds investment platform.
Search for the ETF name under the “Invest” tab.
US-centric ESG ETFs
Our picks are iShares ESG Aware MSCI USA ETF (ESGU US), Xtrackers MSCI U.S.A. ESG Leaders Equity ETF (USSG), and iShares MSCI USA ESG Select ETF (SUSA).
All three picks seek exposure to US companies with positive ESG characteristics. Their highest sector exposure is the tech sector at about 30%.
Global and diversified ESG ETFs
For more global exposure in Europe, Australia, Asia, and the Far East with favourable ESG practices, consider iShares Trust iShares ESG Aware MSCI EAFE ETF (ESGD US).
This ETF invests in large- and mid-capitalisation Developed Market equities, excluding the US and Canada.
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