New Trade for November 27th, 2020

Markets are expected to have much lower volume today with stock trading closing at 1 p.m. after the Thanksgiving holiday.  Today the holiday shopping season kicks off with Black Friday.  

More and more consumers are considering the ethics of the companies behind the products they purchase.  Which means 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 attracted more than $26 billion of net new money in the first half of 2020, 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                         1.81B
  • NAV                                  159.75
  • YTD Total Return             18.99%
  • Yield                                  1.33%
  • Expense Ratio                   0.25%
  • Inception Date           2005-01-24
  • Top Holdings: AAPL, MSFT, ACN