In this article, we discuss the 5 best ESG ETFs to buy. If you want to read our discussion on ESG-related investment trends, you can go directly to the 10 Best ESG ETFs.
5. Invesco Water Resources ETF (NYSEARCA:PHO)
5-Year Price Performance: 69.5%
Total Net Assets as of September 13, 2023: $1.9 billion
Expense Ratio: 0.60%
Number of Holdings: 39
Invesco Water Resources ETF (NYSEARCA:PHO), launched in 2005, focuses on investing in water-related companies globally.
The fund tracks the NASDAQ OMX US Water Index. It invests in US and international companies involved in water utilities, infrastructure, equipment, instruments, and materials. Water infrastructure and technology companies in the ETF are focused on providing clean water and water conservation solutions, aligning positively with environmental goals. Invesco Water Resources ETF (NYSEARCA:PHO) pays out quarterly dividends to investors. The current distribution yield stands at 0.85% as of September 13.
4. Nuveen ESG Large-Cap Growth ETF (CBOE:NULG)
5-Year Price Performance: 69.5%
Total Net Assets as of September 13, 2023: $1.26 billion
Expense Ratio: 0.26%
Number of Holdings: 95
Nuveen ESG Large-Cap Growth ETF (CBOE:NULG) is an actively managed ETF launched in December 2016. The ETF focuses on large-cap US stocks with growth characteristics and strong ESG metrics concerning carbon emissions, labor practices, board diversity, and business ethics. The fund reconstitutes the portfolio 4 times a year, aiming for holdings with above-average ESG ratings relative to sector peers. Nuveen ESG Large-Cap Growth ETF’s (CBOE:NULG) top holdings include Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), Eli Lilly and Company (NYSE:LLY), and Visa Inc. (NYSE:V).
3. Shelton Sustainable Equity Investor (NASDAQ:NEXTX)
5-Year Price Performance: 84.3%
Total Net Assets as of September 13, 2023: $188.02 million
Expense Ratio: 1.16%
Number of Holdings: 43
Shelton Sustainable Equity Investor (NASDAQ:NEXTX) is an actively managed fund that focuses on US large-cap stocks with strong ESG characteristics. The fund applies the negative screening methodology to exclude stocks from numerous sectors that do not meet the ESG criteria. Shelton Capital Management conducts bottom-up fundamental analysis with a focus on financial strength, management quality, and competitive position, as well as positive ESG metrics to make investment decisions.
2. iShares Global Clean Energy ETF (NASDAQ:ICLN)
5-Year Price Performance: 84.5%
Total Net Assets as of September 13, 2023: $3.48 billion
Expense Ratio: 0.41%
Number of Holdings: 100
iShares Global Clean Energy ETF (NASDAQ:ICLN), launched in June 2008, provides exposure to global clean energy stocks. It tracks the S&P Global Clean Energy Index. The fund invests in companies involved in solar, wind, hydroelectric, geothermal, biofuels, and other renewable energy technologies. iShares Global Clean Energy ETF (NASDAQ:ICLN) is concentrated, with the top 10 holdings representing about 48.1% of the portfolio. The ETF’s portfolio mainly comprises mid and small-cap stocks. The ETF pays an annual dividend to investors, and its current yield stands at 1%.
1. Invesco Solar ETF (NYSEARCA:TAN)
5-Year Price Performance: 172.1%
Total Net Assets as of September 13, 2023: $1.63 billion
Expense Ratio: 0.69%
Number of Holdings: 44
Invesco Solar ETF (NYSEARCA:TAN) is one of the largest solar-focused ETFs, launched in April 2008. It is managed by Invesco and tracks the MAC Global Solar Energy Index. The ETF is highly concentrated, focusing mainly on small and mid-cap solar stocks. Approximately half of its assets are directed towards investments in US-based firms, while notable allocations are also made to companies in China, Germany, and Spain. The fund invests in companies involved in solar panel manufacturing, solar power production, and component suppliers. The ETF has been included in our list of the best ESG ETFs as it positively aligns with the environmental goals of reducing fossil fuels and emissions and supports the UN’s Sustainable Development goals.
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