ESGU vs PABU

ESGUAiShares ESG Aware MSCI USA ETF

PABUBiShares Paris-Aligned Climate Optimized MSCI USA ETF

In short

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.

PABU A Paris climate mandate at plain index-fund pricing. PABU follows an MSCI benchmark that pushes US large and mid caps onto a decarbonization path, landing on roughly 90 stocks for 0.10% a year.

Stated mandate

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.

PABU The fund tracks the MSCI USA Climate Paris Aligned Benchmark Extended Select Index, which is composed of U.S. large- and mid-capitalization stocks selected and weighted to follow a decarbonization trajectory, reduce climate-related transition and physical risks, and increase exposure to companies positioned for the low-carbon transition.

Why people hold it

• 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.

• PABU 0.10% a year, half the 0.20% median for its US equity peer group, and level with the cheapest broad-beta names in that group like GUSA.
• The climate work is written into the index, not left to a manager: MSCI selects and weights names to follow a decarbonization trajectory and cut transition and physical climate risk.ishares.com
• Live since 2022, run on the iShares shelf, and now a multi-billion-dollar fund. Among the stronger mandate implementations in its peer group.
• Quarterly distributions and a straightforward index structure, so there is no derivatives layer or options overlay to unpack.

Worth knowing

• 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

• PABU Roughly 90 stocks, not the whole market. Results can diverge from a standard US large-cap fund in either direction.
• Thinly traded next to broad-beta peers such as ILCB, so spreads can widen and limit orders matter more than the expense ratio suggests.
• The decarbonization rules reshape sector and stock weights versus a market-cap MSCI USA portfolio. That tilt is the point, not a side effect.

Full ESGU profile⁠

Full PABU profile⁠