As environmental, social, and governance (ESG) investing continues to gain steam in the capital markets, market participants offering ESG products will have to differentiate themselves from the masses. One way is via lower fees, which is already happening in Europe, while in the United States, ETF investors can opt for low-cost funds like the SPDR S&P 500 ESG ETF (EFIV).
At a 0.10% expense ratio, EFIV seeks to provide investment results that correspond generally to the total return performance of an index that provides exposure to securities that meet certain sustainability criteria (criteria related to ESG factors) while maintaining similar overall industry group weights as the S&P 500 Index. The fund is up 14% year-to-date.
ESG Now an ‘Extensive Feature’ to the Investment Process
As ESG continues its popularity spike even amid the Covid-19 pandemic, it’s almost becoming an essential component of a balanced portfolio.