New Trade for September 23rd, 2020

Futures are mixed this morning after yesterday’s rollercoaster ride.  The Dow broke a multi-day losing streak during the previous session and is set to open considerably higher today.  Capitol Hill hearings continue today.  Federal Reserve Chairman Jerome Powell will appear at a hearing of the House Select Subcommittee on the Coronavirus Crisis.  A pessimistic outlook for the economy was expressed in yesterday’s hearing.

A host of social and political issues have arisen amidst the global health and economic crisis.  With a new force of socially and environmentally conscious investors, companies are taking more responsibility than ever. 

 While Wall Street is mainly concerned with profits, many executives understand climate change comes with real financial risks.  Furthermore, the recent global protests against racism are a call to action for businesses to take action against any form of discrimination. ESG (environmental, social and governance) issues have become such an important focus for investors and businesses alike that some index providers have begun to rank companies based on how ethically they operate.  

You too can keep your values in sync with your investments by focusing on highly rated ESG companies.  One easy way to do that is through a socially responsible ESG ETF.  We like Vanguard ESG U.S. Stock ETF (ESGV) for it’s deep trough of holdings and for  its relatively low expense ratio of 0.12%.

ESGV is designed to feature U.S. companies that post above-average ratings on ESG characteristics.  It’s tied to a large group of holding, with nearly 1,500 total components. Given the depth of the lineup of stocks, it includes a bunch of smaller names as well.  This fund may appeal to some investors since top holdings include old favorites such as Apple, but further down the list are a host of relatively unknown stocks across all sectors of the U.S. economy.

Vanguard ESG U.S. Stock ETF (ESGV)

  • Net Assets                            1.57B
  • NAV                                       57.70
  • Yeild                                     1.37%
  • Expense Ratio                      0.12%
  • Inception Date              2018-09-18
  • Top Holdings:  MSFT, AMZN, AAPL


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