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Sustainable & ESG Investing ETFs: Building a Greener and More Ethical Portfolio

Your comprehensive guide to investing in Sustainable & ESG ETFs for long-term growth and impact

Guide to Investing in Sustainable & ESG ETFs

Sustainable and ESG (Environmental, Social, and Governance) investing has transformed from a niche strategy to a mainstream approach, driven by increasing awareness of climate change, social responsibility, and corporate governance. Sustainable & ESG ETFs provide investors with a diversified and transparent way to align their portfolios with their values while targeting competitive returns. These ETFs focus on companies that meet stringent ESG criteria, such as low carbon footprints, ethical labor practices, and strong governance structures. By investing in Sustainable & ESG ETFs, you can support positive change while potentially benefiting from the growth of forward-thinking companies.

Key Benefits:

Align with Values

Invest in companies that prioritize environmental sustainability, social responsibility, and ethical governance, aligning your portfolio with your personal values.

Long-Term Growth Potential

Tap into the growth of industries like renewable energy, clean technology, and socially responsible businesses, which are positioned for long-term success.

Risk Mitigation

Reduce exposure to companies with poor ESG practices, which may face regulatory penalties, reputational damage, or financial underperformance.

Diversification

Gain broad exposure to a range of sectors and companies that meet high ESG standards, spreading risk across multiple industries and geographies.

ETFs in Industry:

ETF Name	Ticker	Expense Ratio	AUM	Asset Class	1 Month	YTD	3 Year	ALL Years
iShares ESG Aware MSCI USA ETF	ESGU	0.15 %	$12.8B	Equity	-1.52 %	12.55 %	20.77 %	15.19 %
Vanguard ESG U.S. Stock ETF	ESGV	0.09 %	$9.5B	Equity	30.09 %	13.52 %	21.04 %	14.65 %
iShares ESG Aware MSCI EAFE ETF	ESGD	0.21 %	$8.9B	Equity	-1.42 %	12.78 %	17.95 %	9.92 %
iShares ESG Aware MSCI EM ETF	ESGE	0.26 %	$4.5B	Equity	5.73 %	26.17 %	24.66 %	9.54 %
iShares ESG MSCI KLD 400 ETF	DSI	0.25 %	$4.2B	Equity	-95.23 %	13.53 %	20.80 %	10.75 %
Vanguard ESG International Stock ETF	VSGX	0.10 %	$4.1B	Equity	87.38 %	17.71 %	20.79 %	9.03 %
iShares ESG Aware US Aggregate Bond ETF	EAGG	0.10 %	$3.8B	Bond	-35.91 %	-62.72 %	4.21 %	6.18 %
iShares MSCI USA ESG Select ETF	SUSA	0.25 %	$3.4B	Equity	-1.68 %	12.46 %	19.66 %	10.44 %
Xtrackers MSCI USA Climate Action Equity ETF	USCA	0.07 %	$2.6B	Equity	-1.18 %	8.31 %	19.36 %	12.97 %
iShares Climate Conscious & Transition MSCI USA ETF	USCL	0.08 %	$2.1B	Equity	19.63 %	9.02 %	19.58 %	14.91 %
iShares Paris-Aligned Climate MSCI USA ETF	PABU	0.10 %	$2B	Equity	-92.41 %	7.13 %	17.92 %	8.66 %
SPDR S&P 500 Fossil Fuel Reserves Free ETF	SPYX	0.20 %	$2B	Equity	-1.67 %	11.59 %	21.17 %	14.57 %
iShares ESG Aware MSCI USA Small-Cap ETF	ESML	0.17 %	$1.8B	Equity	-2.58 %	17.87 %	16.91 %	10.55 %
Nuveen ESG Large-Cap Value ETF	NULV	0.26 %	$1.7B	Equity	-55.89 %	18.49 %	17.78 %	10.42 %
SPDR S&P 500 ESG ETF	EFIV	0.10 %	$1.6B	Equity	-1.38 %	12.88 %	21.12 %	17.47 %
Nuveen ESG Large-Cap Growth ETF	NULG	0.26 %	$1.4B	Equity	-3.87 %	14.42 %	21.19 %	18.29 %
Dimensional US Sustainability Core 1 ETF	DFSU	0.17 %	$1.3B	Equity	-12.38 %	11.26 %	20.16 %	12.06 %
Invesco MSCI Global Climate 500 ETF	KLMT	0.10 %	$1.2B	Equity	-42.26 %	14.38 %	13.56 %	7.65 %
BlackRock U.S. Carbon Transition Readiness ETF	LCTU	0.14 %	$1.2B	Equity	-1.41 %	11.13 %	20.05 %	12.56 %
iShares ESG Advanced MSCI USA ETF	USXF	0.10 %	$1.2B	Equity	-1.59 %	18.39 %	24.41 %	18.38 %
Nuveen ESG Small-Cap ETF	NUSC	0.31 %	$1.1B	Equity	-4.21 %	12.63 %	12.94 %	9.52 %
iShares MSCI ACWI Low Carbon Target ETF	CRBN	0.20 %	$946.1M	Equity	-60.66 %	12.34 %	20.80 %	10.89 %
iShares ESG MSCI USA Leaders ETF	SUSL	0.10 %	$867.5M	Equity	-86.28 %	12.40 %	21.49 %	-18.91 %
iShares ESG Advanced MSCI EAFE ETF	DMXF	0.12 %	$744.8M	Equity	-90.05 %	15.61 %	17.29 %	11.34 %
iShares ESG Advanced Total USD Bond Market ETF	EUSB	0.12 %	$693.3M	Bond	-7.63 %	-38.23 %	4.60 %	7.71 %
Putnam Sustainable Leaders ETF	PLDR	0.60 %	$649.2M	Equity	0.00 %	1.69 %	15.35 %	8.65 %
Dimensional International Sustainability Core 1 ETF	DFSI	0.24 %	$639M	Equity	1.11 %	11.61 %	19.74 %	12.00 %
Global X Conscious Companies ETF	KRMA	0.43 %	$591.8M	Equity	2.47 %	8.58 %	15.96 %	11.79 %
Nuveen ESG International Developed Markets Equity ETF	NUDM	0.31 %	$499.3M	Equity	-1.93 %	11.99 %	18.54 %	8.58 %
Dimensional Global Sustainability Fixed Income ETF	DFSB	0.24 %	$455.4M	Bond	-54.14 %	-10.09 %	4.71 %	4.56 %
Calvert US Large-Cap Core Responsible Index ETF	CVLC	0.15 %	$420.5M	Equity	-1.74 %	13.08 %	21.23 %	16.61 %
Nuveen ESG U.S. Aggregate Bond ETF	NUBD	0.16 %	$412.8M	Bond	-44.86 %	-77.54 %	4.11 %	7.16 %
iShares Trust iShares USD Green Bond ETF	BGRN	0.20 %	$401.8M	Bond	-7.58 %	4.74 %	4.99 %	9.31 %
Nuveen ESG Mid-Cap Growth ETF	NUMG	0.31 %	$382.6M	Equity	-5.53 %	-4.15 %	6.19 %	8.89 %
ClearBridge Large Cap Growth ESG ETF	LRGE	0.48 %	$380.9M	Equity	-48.55 %	7.04 %	17.56 %	15.27 %
Nuveen ESG Mid-Cap Value ETF	NUMV	0.31 %	$362.8M	Equity	-2.52 %	12.61 %	16.72 %	9.81 %
Dimensional Emerging Markets Sustainability Core 1 ETF	DFSE	0.41 %	$354.4M	Equity	3.92 %	20.58 %	20.82 %	12.15 %
IQ Candriam ESG U.S. Large Cap Equity ETF	IQSU	0.09 %	$345.6M	Equity	-1.24 %	13.90 %	18.02 %	15.71 %
Nuveen ESG Emerging Markets Equity ETF	NUEM	0.36 %	$306.5M	Equity	5.12 %	22.34 %	21.29 %	8.21 %
iShares ESG Select Screened S&P 500 ETF	XVV	0.08 %	$301.4M	Equity	-1.18 %	10.84 %	21.48 %	-3.82 %
Putnam Sustainable Future ETF	PFUT	0.65 %	$297.1M	Equity	0.00 %	2.25 %	10.39 %	58.02 %
iShares ESG Select Screened S&P Mid-Cap ETF	XJH	0.12 %	$255.5M	Equity	-3.75 %	13.03 %	14.65 %	8.02 %
Putnam PanAgora ESG International Equity ETF	PPIE	0.49 %	$241.8M	Equity	0.00 %	7.71 %	16.97 %	5.31 %
SPDR MSCI USA Gender Diversity ETF	SHE	0.20 %	$239.6M	Equity	-88.56 %	20.58 %	22.75 %	12.89 %
Xtrackers Net Zero Pathway Paris Aligned US Equity ETF	USNZ	0.10 %	$229.7M	Equity	51.32 %	12.81 %	21.00 %	10.71 %
BlackRock World ex U.S. Carbon Transition Readiness ETF	LCTD	0.20 %	$215.2M	Equity	-72.84 %	11.02 %	17.38 %	13.69 %
Adasina Social Justice All Cap Global ETF	JSTC	0.89 %	$211.4M	Equity	-1.64 %	12.33 %	14.11 %	-4.60 %
iShares MSCI Global Sustainable Development Goals ETF	SDG	0.49 %	$174.1M	Equity	-62.37 %	8.62 %	7.69 %	8.19 %
PIMCO Enhanced Short Maturity Active ESG Exchange-Traded Fund	EMNT	0.24 %	$171.9M	Bond	11.10 %	2.67 %	5.06 %	11.38 %
Amplify Etho Climate Leadership U.S. ETF	ETHO	0.45 %	$151.2M	Equity	-1.16 %	22.85 %	17.26 %	10.40 %
SPDR MSCI ACWI Climate Paris Aligned ETF	NZAC	0.12 %	$144.9M	Equity	-80.30 %	9.42 %	19.01 %	12.84 %
Invesco MSCI Sustainable Future ETF	ERTH	0.67 %	$141.3M	Equity	-3.72 %	-3.17 %	32.15 %	4.55 %
Calvert International Responsible Index ETF	CVIE	0.18 %	$132.2M	Equity	1.04 %	21.31 %	23.19 %	16.29 %
FlexShares STOXX US ESG Select Index Fund	ESG	0.32 %	$117.7M	Equity	-81.71 %	14.77 %	19.58 %	15.03 %
Harbor Osmosis Emerging Markets Resource Efficient ETF	EFFE	0.78 %	$106.2M	Multi-Asset	7.49 %	26.85 %	15.49 %	9.68 %
US Vegan Climate ETF	VEGN	0.60 %	$105.6M	Equity	27.01 %	27.31 %	25.97 %	14.38 %
iShares Paris-Aligned Climate MSCI World ex USA ETF	PABD	0.12 %	$99M	Equity	-1.65 %	10.04 %	14.85 %	8.37 %
iShares ESG Select Screened S&P Small-Cap ETF	XJR	0.12 %	$93.9M	Equity	-3.69 %	18.22 %	15.49 %	8.03 %
Hennessy Stance ESG ETF	STNC	0.85 %	$92.2M	Equity	-1.67 %	9.45 %	12.23 %	8.60 %
iShares ESG Advanced MSCI EM ETF	EMXF	0.17 %	$87.5M	Equity	4.65 %	26.79 %	23.08 %	8.55 %
FlexShares STOXX Global ESG Select Index Fund	ESGG	0.42 %	$84.7M	Equity	-60.13 %	16.88 %	21.75 %	11.41 %
PIMCO RAFI ESG U.S. ETF	RAFE	0.29 %	$81.8M	Multi-Asset	2.37 %	20.63 %	21.26 %	4.89 %
Invesco ESG NASDAQ 100 ETF	QQMG	0.20 %	$70.1M	Equity	-57.81 %	17.92 %	25.78 %	15.70 %
Calvert US Mid-Cap Core Responsible Index ETF	CVMC	0.15 %	$65.2M	Equity	-2.70 %	17.90 %	16.75 %	-16.45 %
FlexShares ESG & Climate US Large Cap Core Index Fund	FEUS	0.09 %	$63.6M	Equity	-77.02 %	12.28 %	19.66 %	9.95 %
FlexShares ESG & Climate Developed Markets ex-US Core Index Fund	FEDM	0.12 %	$50.3M	Equity	1.51 %	13.27 %	17.53 %	5.56 %
FlexShares ESG & Climate Investment Grade Corporate Core Index Fund	FEIG	0.12 %	$43M	Bond	-57.73 %	-1.07 %	4.89 %	4.15 %
AXS Green Alpha ETF	NXTE	1.00 %	$40.4M	Equity	4.01 %	25.88 %	18.03 %	8.11 %
Putnam PanAgora ESG Emerging Markets Equity ETF	PPEM	0.60 %	$40.2M	Equity	0.00 %	30.04 %	23.46 %	12.34 %
Nuveen ESG Large-Cap ETF	NULC	0.21 %	$35.1M	Equity	-1.02 %	15.06 %	19.69 %	10.45 %
Carbon Collective Climate Solutions U.S. Equity ETF	CCSO	0.35 %	$27.7M	Equity	-4.31 %	6.36 %	11.46 %	-18.65 %
iShares ESG Aware 80/20 Aggressive Allocation ETF	EAOA	0.18 %	$27.4M	Multi-Asset	-2.18 %	11.95 %	17.32 %	11.89 %
Martin Currie Sustainable International Equity ETF	MCSE	0.61 %	$27.1M	Equity	0.00 %	65.55 %	95.68 %	10.40 %
iShares ESG MSCI EM Leaders ETF	LDEM	0.17 %	$27M	Equity	2.43 %	7.82 %	16.55 %	13.81 %
Matthews Emerging Markets Sustainable Future Active ETF	EMSF	0.79 %	$25.2M	Equity	4.48 %	40.54 %	20.71 %	7.46 %
Schwab Ariel ESG ETF	SAEF	0.59 %	$23.6M	Equity	0.00 %	12.79 %	13.83 %	8.49 %
Nuveen ESG Dividend ETF	NUDV	0.26 %	$22.3M	Equity	56.08 %	14.80 %	16.19 %	8.44 %
iShares ESG Aware 60/40 Balanced Allocation ETF	EAOR	0.19 %	$21.9M	Multi-Asset	21.09 %	8.33 %	14.05 %	9.01 %
Invesco ESG S&P 500 Equal Weight ETF	RSPE	0.20 %	$21.9M	Equity	86.66 %	17.23 %	17.52 %	9.03 %
iShares ESG Aware MSCI USA Growth ETF	EGUS	0.18 %	$20.5M	Equity	-1.98 %	9.55 %	23.84 %	10.19 %
PGIM Jennison Better Future ETF	PJBF	0.59 %	$18.1M	Equity	0.00 %	6.62 %	10.30 %	10.38 %
Fidelity Sustainable U.S. Equity ETF	FSST	0.59 %	$14M	Equity	0.00 %	0.00 %	14.62 %	9.66 %
Calamos Antetokounmpo Global Sustainable Equities ETF	SROI	0.95 %	$12.9M	Equity	-2.06 %	11.44 %	15.22 %	10.69 %
Invesco Real Assets ESG ETF	IVRA	0.59 %	$12.7M	Equity	7.28 %	10.88 %	13.21 %	5.52 %
Goldman Sachs Future Planet Equity ETF	GSFP	0.75 %	$11.5M	Equity	0.00 %	10.32 %	3.63 %	7.56 %
Gabelli Love Our Planet & People ETF	LOPP	0.00 %	$10.5M	Equity	-3.33 %	12.65 %	16.56 %	6.83 %
Nuveen Winslow Large-Cap Growth ESG ETF	NWLG	0.65 %	$8.8M	Equity	0.00 %	-23.37 %	12.35 %	7.60 %
Janus Henderson U.S. Sustainable Equity ETF	SSPX	0.55 %	$8.7M	Equity	0.00 %	17.93 %	17.50 %	9.28 %
iShares ESG MSCI USA Min Vol Factor ETF	ESMV	0.18 %	$8.6M	Equity	1.08 %	9.98 %	12.01 %	5.64 %
iShares ESG Aware 30/70 Conservative Allocation ETF	EAOK	0.18 %	$8.4M	Multi-Asset	3.55 %	3.78 %	9.07 %	8.16 %
KraneShares European Carbon Allowance Strategy ETF	KEUA	0.82 %	$7.4M	Commodity	0.00 %	-19.22 %	-8.46 %	4.79 %
SPDR S&P SmallCap 600 ESG ETF	ESIX	0.12 %	$6.4M	Equity	0.00 %	10.80 %	11.79 %	4.75 %
iShares ESG Aware 40/60 Moderate Allocation ETF	EAOM	0.18 %	$6.2M	Multi-Asset	12.79 %	5.33 %	10.74 %	8.46 %
VanEck Morningstar ESG Moat ETF	MOTE	0.50 %	$6M	Equity	0.00 %	2.09 %	14.03 %	2.42 %
Nuveen Sustainable Core ETF	NSCR	0.46 %	$5.8M	Equity	0.00 %	-6.93 %	6.24 %	5.28 %
JPMorgan Carbon Transition U.S. Equity Fund	JCTR	0.15 %	$5.7M	Equity	0.00 %	12.79 %	22.62 %	9.89 %
Invesco ESG NASDAQ Next Gen 100 ETF	QQJG	0.20 %	$5.5M	Equity	-55.68 %	33.11 %	14.68 %	8.31 %
Guinness Atkinson Funds SmartETFs Sustainable Energy II Fund	SOLR	0.79 %	$3.8M	Equity	0.00 %	12.11 %	4.47 %	9.93 %
SPDR MSCI USA Climate Paris Aligned ETF	NZUS	0.10 %	$3.5M	Equity	0.00 %	4.72 %	17.73 %	12.10 %
Calvert US Large-Cap Diversity, Equity and Inclusion Index ETF	CDEI	—	—	Equity	27.65 %	13.81 %	20.09 %	-1.66 %
Stance Sustainable Beta ETF	CHGX	—	—	Equity	-1.45 %	21.26 %	10.54 %	8.34 %
Harbor Osmosis International Resource Efficient ETF	EFFI	—	—	Equity	54.92 %	13.24 %	13.62 %	9.49 %
Invesco MSCI North America Climate ETF	KLMN	—	—	Equity	44.32 %	13.14 %	9.06 %	7.34 %

Why Invest?

Sustainable & ESG investing is no longer just about ethics—it’s about identifying companies poised for long-term success in a rapidly changing world. Investing in Sustainable & ESG ETFs allows you to capitalize on trends like the transition to renewable energy, corporate transparency, and social justice while mitigating risks associated with unsustainable practices. These funds offer diversified exposure to high-performing companies that align with global sustainability goals, making them a compelling addition to modern investment portfolios.

Expert Insights:

When evaluating Sustainable & ESG ETFs, consider factors such as the fund’s ESG scoring methodology, sector diversification, and exclusion criteria. Focus on ETFs that balance environmental, social, and governance factors without sacrificing financial performance. Pay attention to regulatory developments, such as carbon pricing and disclosure requirements, as these can significantly impact ESG-focused companies. Position sizing should account for the sector’s growth potential and its alignment with broader market trends.

Investment Considerations

While Sustainable & ESG investing offers significant potential, investors should consider these key factors:

ESG Scoring Variability

Different ETFs use varying methodologies to assess ESG performance, so it’s important to understand the criteria behind each fund.

Greenwashing Risks

Some companies may overstate their ESG commitments. ETFs with rigorous screening processes can help mitigate this risk.

Regulatory Changes

Evolving ESG regulations can impact company valuations and fund performance, requiring ongoing monitoring.

Portfolio Allocation

Sustainable & ESG ETFs can complement traditional investments, but allocation should align with overall risk tolerance and financial goals.

Sector Outlook

Industry Trends and Growth Drivers

The Sustainable & ESG sector is experiencing rapid growth, driven by global commitments to sustainability and ethical business practices.

Renewable Energy Transition

The shift from fossil fuels to renewable energy sources like solar and wind is accelerating, creating opportunities for ESG-focused companies.

Corporate Transparency

Investors are demanding greater disclosure of ESG metrics, pushing companies to adopt more transparent and accountable practices.

Social Equity Initiatives

Companies prioritizing diversity, equity, and inclusion are gaining favor among investors and consumers alike.