Investors were already looking ahead to 2021 after the March fiasco spun the equities world off its axis. While it’s starting to recover, ETF investors looking to shore up their portfolios for 2021 will want to consider ESG via the SPDR S&P 500 ESG ETF (EFIV).

The fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of an index that provides exposure to securities that meet certain sustainability criteria (criteria related to environmental, social and governance (“ESG”) factors) while maintaining similar overall industry group weights as the S&P 500 Index.

In seeking to track the performance of the S&P 500 ESG Index (the “index”), the fund employs a sampling strategy, which means that it is not required to purchase all of the securities represented in the index. Overall, EFIV gives investors:

  • Investment results that, before fees and expenses, correspond generally to the S&P 500 ESG Index.
  • Exposure to an index that is designed to select S&P 500 firms meeting certain sustainability criteria (criteria related to environmental, social and governance factors) while maintaining similar overall industry group weights as the S&P 500 Index.
  • Potential ESG core exposure, based on its focus on sustainability criteria and comprehensive market coverage of the flagship core S&P 500 Index.

EFIV Chart

A Biden Administration Will Usher in More Clean Energy Plans

With a Joe Biden presidency on the horizon, a bigger budget for ESG could mean bigger gains for EFIV.

“A Joe Biden administration is bound to usher in a 180-degree pivot on climate change from the outgoing presidency,” an OilPrice.com article said. “But with control of the Senate hanging in the balance with the battle set to go down to the wire in Georgia, Biden’s plan to squeeze $2 trillion from the federal purse to pursue his ambitious Climate Plan could end up severely hamstrung. But with the global shift to renewable energy in full swing, the American political landscape might not matter that much in the long run.”

A Biden Administration Will Usher in More Clean Energy Plans

“Indeed, Goldman Sachs has predicted that global capital spending on renewable energy will surpass fossil fuel Capex for the first time ever in 2021,” the article added. “According to the investment banker, renewable power will reach 25% of the total energy supply capex in 2021, beating out hydrocarbons for the first time ever. According to Goldman’s Carbonomics Report, renewables will reach 25% of the total energy supply capex in 2021, beating out upstream oil and gas investments for the first time in history.”

For more news and information, visit the ESG Channel.