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Is iShares ESG Aware MSCI USA ETF (ESGU) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Growth category of the market, the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) is a smart beta exchange traded fund launched on 12/01/2016.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
The fund is sponsored by Blackrock. It has amassed assets over $15.15 billion, making it one of the largest ETFs in the Style Box - All Cap Growth. ESGU seeks to match the performance of the MSCI USA ESG Focus Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.15%.
It's 12-month trailing dividend yield comes in at 0.96%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 35.3% of the portfolio. Financials and Healthcare round out the top three.
Taking into account individual holdings, Nvidia Corp (NVDA) accounts for about 8.14% of the fund's total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
ESGU's top 10 holdings account for about 39.04% of its total assets under management.
Performance and Risk
The ETF has added about 16.14% and is up about 13.35% so far this year and in the past one year (as of 11/27/2025), respectively. ESGU has traded between $108.06 and $150.36 during this last 52-week period.
ESGU has a beta of 1.03 and standard deviation of 15.55% for the trailing three-year period. With about 286 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 $10.61 billion in assets, Vanguard ESG U.S. Stock ETF has $11.77 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.
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Is iShares ESG Aware MSCI USA ETF (ESGU) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - All Cap Growth category of the market, the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) is a smart beta exchange traded fund launched on 12/01/2016.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
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
The fund is sponsored by Blackrock. It has amassed assets over $15.15 billion, making it one of the largest ETFs in the Style Box - All Cap Growth. ESGU seeks to match the performance of the MSCI USA ESG Focus Index before fees and expenses.
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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.15%.
It's 12-month trailing dividend yield comes in at 0.96%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 35.3% of the portfolio. Financials and Healthcare round out the top three.
Taking into account individual holdings, Nvidia Corp (NVDA) accounts for about 8.14% of the fund's total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
ESGU's top 10 holdings account for about 39.04% of its total assets under management.
Performance and Risk
The ETF has added about 16.14% and is up about 13.35% so far this year and in the past one year (as of 11/27/2025), respectively. ESGU has traded between $108.06 and $150.36 during this last 52-week period.
ESGU has a beta of 1.03 and standard deviation of 15.55% for the trailing three-year period. With about 286 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 $10.61 billion in assets, Vanguard ESG U.S. Stock ETF has $11.77 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.