We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is iShares ESG Aware MSCI USA ETF (ESGU) a Strong ETF Right Now?
Read MoreHide Full Article
The iShares ESG Aware MSCI USA ETF (ESGU - Free Report) was launched on 12/01/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
ESGU is managed by Blackrock, and this fund has amassed over $14.82 billion, which makes it one of the largest ETFs in the Style Box - All Cap Growth. ESGU, before fees and expenses, seeks to match the performance of the MSCI USA ESG Focus Index.
The MSCI USA Extended ESG Focus Index comprises of U.S. companies that have positive environmental, social and governance characteristics while exhibiting risk and return characteristics similar to those of the parent index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.15% for ESGU, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.29%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For ESGU, it has heaviest allocation in the Information Technology sector --about 35.4% of the portfolio --while Financials and Consumer Discretionary round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA) accounts for about 7.26% of the fund's total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).
ESGU's top 10 holdings account for about 37.31% of its total assets under management.
Performance and Risk
Year-to-date, the iShares ESG Aware MSCI USA ETF has added about 13.02% so far, and was up about 16.21% over the last 12 months (as of 09/25/2025). ESGU has traded between $108.06 $145.86 in this past 52-week period.
The ETF has a beta of 1.03 and standard deviation of 16.55% for the trailing three-year period. With about 285 holdings, it effectively diversifies company-specific risk .
Alternatives
iShares ESG Aware MSCI USA ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
iShares ESG Aware MSCI EAFE ETF (ESGD) tracks MSCI EAFE ESG Focus Index and the Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX. iShares ESG Aware MSCI EAFE ETF has $10.08 billion in assets, Vanguard ESG U.S. Stock ETF has $11.47 billion. ESGD has an expense ratio of 0.21% and ESGV changes 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Growth
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is iShares ESG Aware MSCI USA ETF (ESGU) a Strong ETF Right Now?
The iShares ESG Aware MSCI USA ETF (ESGU - Free Report) was launched on 12/01/2016, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Growth category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
ESGU is managed by Blackrock, and this fund has amassed over $14.82 billion, which makes it one of the largest ETFs in the Style Box - All Cap Growth. ESGU, before fees and expenses, seeks to match the performance of the MSCI USA ESG Focus Index.
The MSCI USA Extended ESG Focus Index comprises of U.S. companies that have positive environmental, social and governance characteristics while exhibiting risk and return characteristics similar to those of the parent index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.15% for ESGU, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 1.29%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For ESGU, it has heaviest allocation in the Information Technology sector --about 35.4% of the portfolio --while Financials and Consumer Discretionary round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA) accounts for about 7.26% of the fund's total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).
ESGU's top 10 holdings account for about 37.31% of its total assets under management.
Performance and Risk
Year-to-date, the iShares ESG Aware MSCI USA ETF has added about 13.02% so far, and was up about 16.21% over the last 12 months (as of 09/25/2025). ESGU has traded between $108.06 $145.86 in this past 52-week period.
The ETF has a beta of 1.03 and standard deviation of 16.55% for the trailing three-year period. With about 285 holdings, it effectively diversifies company-specific risk .
Alternatives
iShares ESG Aware MSCI USA ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
iShares ESG Aware MSCI EAFE ETF (ESGD) tracks MSCI EAFE ESG Focus Index and the Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX. iShares ESG Aware MSCI EAFE ETF has $10.08 billion in assets, Vanguard ESG U.S. Stock ETF has $11.47 billion. ESGD has an expense ratio of 0.21% and ESGV changes 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Growth
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.