The ETF ecosystem has grown rapidly since the arrival of the ETF rule supercharged the wrapper. Active and passive, equity and non-equity, ETF strategies have proliferated to meet all kinds of investor needs. Traditionally, for young ETFs, the three-year milestone represents an important step forward, with many brokerages adding ETFs to their sites only once they have sufficient track records.
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The latest crop of ETFs passing that three-year milestone offers some intriguing insights. While crypto ETFs have certainly stood out among ETFs launched since November 1, 2022, the top non-crypto ETF title goes to a relatively surprising fund, with a notable ESG screen in its index.
The ESG-Oriented Fund Outperforming Rivals
The Xtrackers S&P 500 Growth Scored & Screened ETF (SNPG) launched on November 9, 2022, per ETF Database data. The strategy charges a 15 basis point fee to track the S&P 500 Growth Scored & Screened Index. Both the index and SNPG saw a name change earlier this year. The fund’s title changed from Xtrackers S&P 500 Growth ESG ETF to the Xtrackers S&P 500 Growth Scored & Screened ETF, with a similar change for its index.
Despite the title change for SNPG and its index, the fund’s approach remains the same. SNPG’s market cap-weighted index includes large-cap firms exhibiting strong growth characteristics. It also looks for companies that display positive environmental, social, and governance (ESG) characteristics in doing so, according to its prospectus.
That has helped the fund return 26.7% over the last three years, according to ETF Database data. Putting aside spot crypto ETFs from GrayScale, which finished first and second for three-year performance, SNPG has outperformed all other ETFs launched on or after November 1, 2022, according to the data over that period.
Despite ESG being out of favor amid a changing policy landscape, ESG ETFs can still perform a major role for investors. For those investors or advisors who need ESG-minded funds to meet their goals, SNPG can appeal on its own — and may speak to the merits of ESG offerings, more broadly.
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