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Is iShares ESG Aware MSCI USA ETF (ESGU) a Strong ETF Right Now?
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A smart beta exchange traded fund, the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) debuted on 12/01/2016, and offers broad exposure to the Style Box - All Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
ESGU is managed by Blackrock, and this fund has amassed over $14.49 billion, which makes it one of the largest ETFs in the Style Box - All Cap Growth. Before fees and expenses, this particular fund 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
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.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
ESGU's 12-month trailing dividend yield is 1.10%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
ESGU's heaviest allocation is in the Information Technology sector, which is about 33.7% of the portfolio. Its Financials and Healthcare round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA) accounts for about 7.38% of the fund's total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
ESGU's top 10 holdings account for about 35.49% of its total assets under management.
Performance and Risk
The ETF has lost about -7.24% and was up about 12.61% so far this year and in the past one year (as of 03/30/2026), respectively. ESGU has traded between $108.06 and $151.79 during this last 52-week period.
The fund has a beta of 1.03 and standard deviation of 14.92% for the trailing three-year period. With about 291 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 Shares (ESGV) tracks FTSE US ALL CAP CHOICE INDEX. iShares ESG Aware MSCI EAFE ETF has $10.3 billion in assets, Vanguard ESG U.S. Stock ETF Shares has $10.69 billion. ESGD has an expense ratio of 0.20% 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?
A smart beta exchange traded fund, the iShares ESG Aware MSCI USA ETF (ESGU - Free Report) debuted on 12/01/2016, and offers broad exposure to the Style Box - All Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
ESGU is managed by Blackrock, and this fund has amassed over $14.49 billion, which makes it one of the largest ETFs in the Style Box - All Cap Growth. Before fees and expenses, this particular fund 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
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.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
ESGU's 12-month trailing dividend yield is 1.10%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
ESGU's heaviest allocation is in the Information Technology sector, which is about 33.7% of the portfolio. Its Financials and Healthcare round out the top three.
When you look at individual holdings, Nvidia Corp (NVDA) accounts for about 7.38% of the fund's total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
ESGU's top 10 holdings account for about 35.49% of its total assets under management.
Performance and Risk
The ETF has lost about -7.24% and was up about 12.61% so far this year and in the past one year (as of 03/30/2026), respectively. ESGU has traded between $108.06 and $151.79 during this last 52-week period.
The fund has a beta of 1.03 and standard deviation of 14.92% for the trailing three-year period. With about 291 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 Shares (ESGV) tracks FTSE US ALL CAP CHOICE INDEX. iShares ESG Aware MSCI EAFE ETF has $10.3 billion in assets, Vanguard ESG U.S. Stock ETF Shares has $10.69 billion. ESGD has an expense ratio of 0.20% 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.