ESGU: Dip Your Toes Into ESG Investing Without Sacrificing Results

Summary

  • Many investors aren't ready to concede returns just to avoid so-called "morally bankrupt" stocks, but with ESGU, you won't have to, as it tracks the MSCI USA Index almost perfectly.
  • MSCI's optimization constraints ensure this, and the majority of excluded stocks have negligible weightings in the S&P 500.
  • ESGU's popularity is a reflection of this; it has assets under management of $22 billion with annual fees of just 0.15% and is an appropriate substitute for S&P 500 funds.

photo on ESG (Environmental, Social, and Corporate Governance) theme. wooden cubes with the acronym "ESG", and sticky notes, on the background of skeleton magnolia leaf
Ivan Martynov/iStock via Getty Images

Investment Thesis

Like dividend investing, value investing, and growth investing, ESG investing can be done on a spectrum. You can invest in stringent ESG funds or try out some "ESG-lite" funds that put a bit of emphasis on environmental, social, and governance factors, but

This article was written by

The Sunday Investor profile picture
4.16K Followers
Build sustainable portfolio income with premium dividend yields up to 10%.

I'm a data-driven ETF analyst who likes to do deep dives into how funds are constructed and what factors are likely to make them winners or losers. I have a database of over 700 ETFs that I follow, so I'm able to show readers the best- and worst-performing funds in each category with each one I review. My preference is for stocks to have strong cash-generating and debt management qualities. I welcome all questions, comments, and suggestions for improvement, and I enjoy my time engaging with the Seeking Alpha community.

I hold a Bachelors degree in Commerce with a major in Accounting and hold a Certificate in Advanced Investment Advice from the Canadian Securities Institute. I have also completed the Portfolio Management Techniques course, fulfilling the educational requirements for a Chartered Investment Manager (CIM) designation. I have passed CFA Level 1, and I am currently studying to become licensed to advise on options and derivatives in Canada. This past November, I became a contributor for the new Hoya Capital Income Builder Marketplace Service, and enjoy working with and sharing ideas with some of the best researchers on Seeking Alpha. Sign up for a free trial today! Hoya Capital Income Builder.

Disclosure: I/we have a beneficial long position in the shares of IVV, SPY, WMT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.