The U.S. has the biggest ETF market in the world by assets, so here are the 10 most ESG friendly ETFs trading in America
Many investors want to make a difference with where they put their capital as environmental, social and governance factors become more critical to the future of our works.
The U.S. has the biggest ETF market in the world by assets, so here are the 10 most ESG friendly ETFs trading in America. Each fund has been given an ETF score by ETF Database, which measures the ability of the underlying holdings to manage key medium- to long-term risks and opportunities arising from ESG factors.
1, iShares MSCI Europe Financials ETF (EUFN)
ESG score: 10
This ETF offers exposure to the financial sector of Western Europe, a corner of the developed world that can exhibit significant volatility and has demonstrated big fluctuations in recent years. Can be a potentially useful tool for those looking to apply a tactical tilt or capitalize on perceived short-term mispricings. Tilted towards large cap stocks.
2, VanEck Vectors Semiconductor ETF (SMH)
ESG score: 9.91
SMH tracks the overall performance of the 25 largest, U.S. listed companies that produce semiconductors, a crucial component of modern computing. Investors should note that this fund is equally split between giant, large, and mid cap size companies, offering a well-balanced risk/return profile. Given its shallow portfolio, SMH is inherently top-heavy; the top ten holdings account for over two-thirds of total assets.
3, Direxion MSCI USA ESG – Leaders vs. Laggards ETF (9.8)
ESG score: 9.8
4, First Trust United Kingdom AlphaDEX Fund (FKU)
ESG score: 9.42
FKU utilizes the AlphaDEX strategy to invest in the U.K. stock market. This methodology involves a quantitative screening methodology designed to identify the stocks from a specific universe that have the greatest potential for capital appreciation.
5, iShares MSCI Denmark ETF
ESG score: 9.37
This fund was the first to employ a Denmark-specific strategy. As is typical of first to market country products, EDEN’s portfolio is relatively shallow. The fund has just over 30 securities with nearly two thirds of the fund’s assets dedicated to the top ten holdings. Large tilt towards health care and industrial equities.
6, Global X FTSE Nordic Region ETF (GXF)
ESG score: 9.03
GXF offers investors exposure to the Nordic region of Europe by investing in securities that trade on the national stock exchanges of the four Nordic countries of Sweden Denmark, Norway, and Finland. For investors looking for high levels of exposure to the Nordic markets in particular, GXF is probably the best 'pure play' option available.
7, iShares MSCI Sweden ETF (EWD)
ESG score: 8.91
EWD offers investors exposure to the European market of Sweden by investing in securities that trade on the national stock exchange of the nation.
8, First Trust NASDAQ Rising Dividend Achievers ETF (RDVY)
ESG score: 8.83
9, Global X MSCI Norway ETF (NORW)
ESG score: 8.8
NORW offers investors exposure to the European market of Norway by investing in securities that trade on the national stock exchange of the nation.
10, iShares MSCI Norway ETF (ENOR)
ESG score: 8.8
Norwegian exposure was once hard to come by as far as ETFs are concerned. While it was not the first of its kind, ENOR was one of the earliest products to dedicate itself to Norway’s economy. While Norway may not have the largest economy in Europe, it certainly presents a number of lucrative opportunities for investors.ESG score: 8.8
