It’s hard to ignore that ESG has taken some hits over the last few years. Frothy returns from tech names following geopolitical and bank-related tumult have, to some degree, overshadowed ESG narratives.
That said, many investors still want smart strategies that invest away from societal ills. Advisors, then, may want to check out strategies like the active ESG ETF AVSU, which has performed well.
See more: 3 Active ETFs for Midcap Investing’s Moment
The Avantis Responsible U.S. Equity ETF (AVSU), actively invests in firms that meet its ESG standards. The ETF considers fundamental criteria, as well. Its managers use third-party ESG data and scoring systems along with its own proprietary screening. AVSU also looks for firms with higher profitability or lower valuations, typically overweighting small-cap growth stocks.
The strategy charges 15 basis points, and launched in March 2022. While some investors may see ESG as limiting a strategy to middling returns, the active ESG ETF has found great returns with that screen.
It has returned 28.8% over one year, per VettaFi data. That has helped it outperform both its ETF Database Category and FactSet Segment averages. On a YTD basis, it has outperformed both those averages, returning about 6% in that time.
Part of that may be due to its active approach. The strategy, then, can adapt quickly to events and also take a deeper look at stocks. By marrying an ESG screen and deeper analysis, its managers can provide a solid satellite allocation
ESG may have lost some of its hype over the last few years, but it remains an important consideration for many advisors. Regulations are still maturing, while the political landscape is still trying to find a working definition for ESG itself. So, for investors on the lookout for an option, consider active ESG ETF AVSU’s marriage of sustainability and returns.
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