ESG vs ESGU

ESGBNorthern Trust STOXX US ESG Select ETF

ESGUAiShares ESG Aware MSCI USA ETF

In short

ESG Most US ESG funds are the S&P 500 with the worst offenders stripped out. ESG starts from a different blueprint: a STOXX index that scores companies on ESG key performance indicators, sampled down to about 300 US names since 2016.

ESGU Screening out companies is easy; keeping the market's shape while you do it is the hard part. ESGU's index optimizes toward stronger ESG characteristics while targeting risk and return similar to the broad MSCI USA Index.

Stated mandate

ESG The fund seeks to track, before fees and expenses, the price and yield performance of the STOXX USA ESG Select KPIs Index. It uses a passive representative-sampling approach to invest in U.S. equities selected using ESG criteria.

ESGU Seeks to track an index of large- and mid-cap U.S. companies selected for favorable environmental, social and governance (ESG) characteristics while seeking risk/return similar to the MSCI USA Index.

Why people hold it

• ESG Not a re-screened S&P 500. Its index ranks US companies on ESG key performance indicators first, then the fund samples that list down to about 300 names.
• Trading since July 2016, well before the ESG land rush, with Northern Trust's index shop behind the build.
• What's on the tin is what's in the box: the portfolio lines up with the ESG mandate in the fund's own documents.
• Boring plumbing, in the good way. A plain 1940 Act index fund with no leverage or derivative overlay, paying shareholders quarterly.

• ESGU Not a screen-and-drop portfolio: the index optimizes toward better ESG characteristics while targeting risk and return similar to the broad MSCI USA Index.ishares.com
• 0.15% a year, below the typical fund in its US ESG group, spread across roughly 300 large- and mid-cap names rather than a narrow shortlist.
• Running since 2016, a multi-billion-dollar iShares fund that pays quarterly and sits in the top quartile of a crowded US ESG peer group.

Worth knowing

• ESG You pay up for the custom build: 0.32% (0.33% gross, net of a waiver through March 1, 2027), above the category median across 48 funds and above screened peers like XVV at 0.08% and ESGU at 0.15%.
• It trades lightly next to the category's giants, so spreads and limit orders matter more here than in a mega-fund.
• A KPI-built book of roughly 300 stocks will wander from the broad US market in sector mix and results, in both directions. That gap is the whole point.

• ESGU Cheaper seats in the same row: XVV at 0.08%, ESGV at 0.09%, SNPE and EFIV at 0.10%, against 0.15% here.
• Market-like risk is the stated goal, so exclusions are lighter than a purist ESG fund and the holdings end up looking a lot like the broad US market.ishares.com
• MSCI's ratings decide who makes the cut, so the portfolio reflects one provider's definition of ESG, not an industry standard.ishares.com

Full ESG profile⁠

Full ESGU profile⁠