Best Performing Impacting Investing ETFs for Q3 2020

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A growing number of investors are placing billions of dollars in socially responsible Impact investing or ESG funds. These portfolios select stocks based on a company’s environmental, social and governance practices, alongside more traditional financial measures. This has spawned a new family of exchange-traded funds (ETFs) that focus on investing criteria for the social good. These environmental, social and governance-focused ETFs allow investors to achieve diversification while owning companies that follow specific ESG criteria. Currently, there are 33 ETFs which have an ESG score of 7.5 (out of a possible 10) or higher according to ETFDB.com. This does not include leveraged or inverse funds or those with under $50 million in assets under management, nor does it include ESG funds with a score below 7.5.

The best ESG ETF for Q3 2020 is the iShares MSCI Global Impact ETF (SDG). Below, we’ll take a look at the top three ESG ETFs. All figures are as of May 18, 2020.

  • Performance over 1-year: 8.9%
  • Expense Ratio: 0.49%
  • Annual Dividend Yield: 1.48%
  • 3-Month Average Daily Volume: 12,344
  • Assets Under Management: $98.0 million
  • Inception Date: April 20, 2016
  • Issuer: iShares

The iShares MSCI Global Impact ETF is a fund tracking the MSCI ACWI Sustainable Impact Index. This fund targets global companies that derive a majority of their revenue from services or products addressing at least one of the United Nations Sustainable Development Goals. The top three holdings for SDG include Gilead Sciences, Inc. (GILD), the biopharmaceutical company; Abbvie, Inc. (ABBV), the biopharmaceutical company; and Tesla, Inc. (TSLA), the electric car maker.

  • Performance over 1-year: 4.8%
  • Expense Ratio: 0.25%
  • Annual Dividend Yield: 1.72%
  • 3-Month Average Daily Volume: 95,061
  • Assets Under Management: $1.3 billion
  • Inception Date: January 24, 2005
  • Issuer: iShares

This fund tracks the roughly 100 large- and mid-cap companies in the MSCI USA Extended ESG Select Index. The index measures the equity performance of large cap companies with positive ESG characteristics relative to their industry and peers while also showing risk-and- return characteristics similar to the MSCI USA Index. Top holdings in the fund include tech giants Microsoft Corp. (MSFT) and Apple, Inc. (AAPL); and Ecolab, Inc. (ECL), the water and hygiene technology company.

  • Performance over 1-year: 3.5%
  • Expense Ratio: 0.15%
  • Annual Dividend Yield: 1.51%
  • 3-Month Average Daily Volume: 1,273,877
  • Assets Under Management: $6.7 billion
  • Inception Date: December 1, 2016
  • Issuer: iShares

ESGU is similar to SUSA in that it aims aims to replicate the risk and return of the broader MSCI USA Index while simultaneously achieving a more sustainable outcome. ESGU provides exposure to high-ESG companies in the mid- and large-cap categories. The top holdings for this fund are Microsoft; Apple; and Amazon.com, Inc. (AMZN), the e-commerce giant.



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