Weekly Watchlist: Socially Conscious Investing

Many public corporations are now focused on ESG (environmental, social and governance) issues.  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 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.  

Even amid the covid-19 pandemic, ESG has been an outperformer, which has been reflected in the popularity of the space.  “Global sales of sustainable bonds, in general, have jumped this year, rising 27% to $196 billion, reflecting increasing investor demand for debt to pay for green and social projects,” a Bloomberg article said.  It’s a sign of investors increased willingness to employ sustainable strategies.  Sustainable strategies have attracted more than $26 billion of net new money this year through August, already surpassing the then-record $21.4 billion they attracted in 2019. 

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. 

iShares MSCI USA ESG Select ETF (SUSA)

SUSA is notable because of its “select” strategy, through which it places stricter requirements on components.  With only 145 holdings in its portfolio, investors are not just getting an S&P fund that excludes Big Oil and Big Tobacco – you’ll instead find a top cut of the biggest companies that truly take ESG issues seriously.  Big tech names like Apple are well-represented, but there are also some names that may surprise you.  For example, take home-improvement company Home Depot (HD) or consulting firm Accenture (ACN).  SUSA gives you a shorter list, but diversified enough to avoid relying on just the top few holdings alone.

  • Net Assets                         1.46B
  • NAV                                  145.94
  • Yield                                  1.50%
  • Expense Ratio                   0.25%
  • Inception Date           2005-01-24
  • Top Holdings: AAPL, MSFT, ACN  

Vanguard ESG U.S. Stock ETF (ESGV)

This fund 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.

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


This ETF excludes companies in the U.S. and Canada to take a more global approach to the ESG investing strategy.  The result is a diverse group of almost 500 companies across geographies and sectors.  Investors should know that some companies in regions like Europe are even more progressive in their environmental, social and corporate governance efforts given greater regulation.  For instance, in 2017, the U.K. enacted legislation that requires any business with 250 or more employees to publicly report its gender pay gap.

  • Net Assets                             3.03B
  • NAV                                        61.33
  • Yield                                       1.81%
  • Expense Ratio                        0.20%
  • Inception Date                2016-06-28
  • Top Holdings: NESN, ROG, SAP.DE

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