New Trade for March 19th, 2021

After yesterday’s tech sell-off, investor sentiment seemed slightly more optimistic with all three benchmarks training slightly higher in early trading.  Before opening bell this morning the Dow was up 1.24% for the week while the S&P was down 0.23% and the Nasdaq had seen a 0.8% loss for the week.  It’s anybody’s guess where the final trading session of the week will lead, but for investors in the know it’s clear — ESG standards are probably not going anywhere anytime soon.  Furthermore, owning the names that uphold these standards has likely never been more pertinent as the world goes through this major shift. 

Interest and adoption of ESG investing has absolutely exploded over the last couple of years.  Shareholders are increasingly voting (by investing) with their conscience and demanding that companies and boards across the globe be held accountable for their Environmental, Social and Governance actions and impact.

Entire nations are committing to carbon neutrality and a growing number of high-profile companies with international operations are also making commitments to reduce carbon emissions and become carbon neutral by a specific date in the race to zero emissions.  Notable examples include China’s 2060 commitment, the United States’ 2050 goal under the Biden administration, the UK’s and the European Union’s 2050 goal, Amazon’s 2040 commitment, Apple’s 2030 commitment, and BP’s 2050 pledge.

Companies with international partnerships and operations are also making changes when it comes to social practices, towards race and gender equality and to ensure the proper treatment of their employees.

Exposure to global ESG investments may be more important now than ever before as some European and Asian Countries are gearing up to make huge advancement in their progress in the coming years.  Investing in companies on an international level can be difficult for every day investors.  A much more sensible route into global ESG investing is through an ETF.  

Our trade highlights one of the top ways to get in international markets where ESG trends and developments are likely to advance more quickly than in the U.S.

The iShares ESG Advanced MSCI EAFE ETF (DMXF) seeks to track the investment results of an index composed of large- and mid-capitalization developed market companies excluding the U.S. and Canada that have a favorable environmental, social and governance rating while applying extensive screens for company involvement in controversial activities.

 In constructing the portfolio, companies in the broad MSCI EAFE Index are rated based on their ESG risk and opportunities management, and controversies scores (0-10, 10 being the most desirable). Securities that have a BBB-rating or above and a score of 3 or above are selected for the portfolio. Companies excluded are those involved in adult entertainment, alcohol, gambling, tobacco, GMO, weapons, nuclear power, firearms, for-profit prisons, and predatory lending, based on revenue thresholds. Companies in the energy sector and industry tied to fossil fuel are also screened out. The index is market-cap weighted with quarterly review for rebalance.

iShares ESG Advanced MSCI EAFE ETF (DMXF)

  • Weighted Average Market Cap    $54.18BB
  • Price/ Earnings Ratio                    31.87
  • Price/ Book Ratio                          2.02
  • 52-week Performance                  N/A
  • 12-week Performance                  +4.57%
  • YTD Daily Total Return                 2.46%
  • Yield                                              N/A
  • Expense Ratio (net)                      0.12%
  • Net Assets                                    95.32M
  • Number of Holdings                      533
  • Top Countries                               Japan, France, U.K.

Where to invest $1,000 right now...

Before you consider buying DMXF, you'll want to see this.

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And it's not DMXF.

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