So, you know that famous economist, Milton Friedman, right? He had this whole idea that companies should only care about their shareholders, not society as a whole. But, like, not everyone’s on board with that thinking. Some of us investors are into considering stuff like environmental, social, and governance (ESG) factors when we’re making investment decisions. And for that, ESG funds are the way to go.
ESG funds let you put your money where your values are. They’re all about social responsibility, good governance, and sustainability – the whole deal.
Now, let’s dive into some of the top ESG funds:
iShares ESG Aware MSCI USA ETF (ESGU):
- Expense Ratio: 0.15%
- AUM: $12.8 billion
- What You Should Know: This fund tracks 300 big and mid-sized U.S. companies that are known for being all about that good ESG stuff. It’s part of BlackRock’s ESG Aware suite and has a focus on sustainability. It’s been doing pretty well since 2016 and doesn’t cost an arm and a leg to invest in. However, it’s not too big on energy, utilities, or small-cap stocks.
iShares ESG Aware MSCI EAFE ETF (ESGD):
- Expense Ratio: 0.2%
- AUM: $7.3 billion
- What You Should Know: ESGD is all about international stocks with solid ESG ratings, especially from developed markets. It’s got a bunch – over 400 – holdings. The catch is that it’s a bit pricier compared to ESGU, and it hasn’t been the hottest performer historically.
iShares ESG Aware MSCI EM ETF (ESGE):
- Expense Ratio: 0.25%
- AUM: $4.3 billion
- What You Should Know: ESGE lets you get in on emerging market stocks that are all about ESG. It tracks almost 300 stocks from places like China, India, and more, all screened for ESG goodness. But here’s the thing: it’s got a higher expense ratio, and it hasn’t quite kept up with the cool kids like ESGU and ESGD.
Vanguard ESG U.S. Stock ETF (ESGV):
- Expense Ratio: 0.09%
- AUM: $6.8 billion
- What You Should Know: ESGV is for those who want to invest in U.S. stocks that are all about ESG. It leaves out companies from industries that raise eyebrows and covers different sectors. Just keep in mind it’s not big on energy, utilities, or international stocks.
Vanguard ESG International Stock ETF (VSGX):
- Expense Ratio: 0.12%
- AUM: $3.4 billion
- What You Should Know: VSGX gives you a taste of both developed and emerging market stocks from around the globe. It’s got a massive portfolio with over 5,000 holdings. But it’s got a bit of a higher expense ratio, although it’s not as pricey as ESGD or ESGE.
iShares ESG Aware U.S. Aggregate Bond ETF (EAGG):
- Expense Ratio: 0.1%
- AUM: $3.1 billion
- What You Should Know: For those of us who like to play it safe, EAGG is all about bonds with good ESG vibes. It’s there to cushion the blow when markets get wild. But remember, bonds historically don’t rake in the big bucks like stocks, and they can be sensitive to interest rate moves.
So, there you have it. These ESG funds give you different ways to invest in line with your values. Each has its perks and quirks, so it’s all about picking the one that vibes the most with your investment goals and principles.