iShares ESG Aware MSCI USA ETF Shows Mixed Performance

ETFs like the iShares ESG Aware MSCI USA ETF (ESGU) offer unique investment opportunities. ESGU, however, has seen a -5.92% decline this year while gaining 9.26% over the last year, highlighting mixed performance.

Date: 13-03-2025

AI Rating: 5

The report discusses the iShares ESG Aware MSCI USA ETF (ESGU), which seeks to track the MSCI USA ESG Focus Index, encompassing U.S. companies with positive environmental, social, and governance characteristics. The fund, managed by Blackrock, has assets exceeding $12.76 billion and an expense ratio of 0.15%. ESGU has a dividend yield of 1.26%.

Performance Overview: The fund has experienced a year-to-date loss of -5.92% but managed to generate a positive return of approximately 9.26% over the past year. This performance illustrates a degree of volatility and mixed market sentiment surrounding ESGU. The fund's 52-week trading range between $108.69 and $134.30 indicates some fluctuation in value.

The fund has a beta of 1.03, suggesting relatively higher market risk compared to its benchmark. Over the trailing three-year period, the standard deviation of 17.35% indicates significant price variability, which may concern more risk-averse investors.

Sector and Holdings: ESGU has significant exposure to the Information Technology sector (30.90%), with notable holdings in Apple Inc. (AAPL, 6.42% of total assets), Microsoft Corp. (MSFT), and Nvidia Corp. (NVDA). These companies are pivotal to the ETF’s performance, especially given their influence on tech valuations.

When considering investment in ESGU, investors should weigh both its mixed performance and the underlying quality of the fund’s holdings, alongside the low expense ratio and transparency that ETFs provide. While ESGU showcases the benefits of a smart beta strategy, the recent performance decline highlights potential risks in the current market environment.

Stocks: AAPL MSFT NVDA