For reference, here is the same chart on the 1-5 year variety:
It would appear these ESG-based ETFs could easily be swapped into an ETF portfolio replacing an existing corporate bond allocation. A natural second question would be: How do the costs compare? As I think one would expect, each are priced competitively versus their non-ESG counterparts, with SUSC at 18 bps and SUSB at 12 bps.
Taking a step back, the advent of these fixed income ESG portfolios now allows for a more robust ESG-only asset allocation, since previously only the equity portion could be allocated to ESG strategies. While there are still a couple of holes and/or limited options in certain categories in the ESG-only space, these ETFs help in filling out the spectrum. Additionally, these ETFs could also allow an ESG investor to replace an existing mutual fund strategy with an ETF, while this was not a previously available choice. Either way, ESG investing in the ETF space continues to evolve.
Clayton Fresk is a Portfolio Manager at Stadion Money Management, a participant in the ETF Strategist Channel.
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