4 Socially Responsible ETFs to buy in 2020
Companies in 2020 are absolutely feeling the pressure to meet market social responsibility demands. In recent years this has been reflected in the integration of Environmental, Social, and Governance standards (ESG) for publicly traded companies. The best thing about these investments? They are offering comparable or better results than a typical market index fund. Down below are some absolute killer ETF's you should considering buying in 2020.
DSI - iShares MSCI KLD 400 Social ETF
DSI is one of the largest socially responsible funds available for purchase with roughly $2.2 billion in assets. The fund looks to track the results of 400 high performing companies with above-average ESG rankings. The funds largest holdings include Microsoft (MSFT) and Facebook (FB) and has an overall preference for technology companies operating in the communications field. The fund operates with a 0.25% expense ration and since its inception in 2006 has seen a 8.56% growth rate. This rate has grown in recent years to a 14.28% annualized return in the past 5 years.
FAN - First Trust ISE Global Wind Energy Index Fund
Like seeing windmills when you're driving around? Well this might be the fund for you. FAN is a global fund composed strictly of companies working in the wind energy sector. The fund's 3 largest holdings are Siemens Gamesa Renewable Energy (SGRE), Vestas Wind Systems (VWS, and Orsted (ORSTED). Although subject to change, the fund has have an averaged annualized return rate of 14.73% over the past 5 years. With an expense ratio of 0.62% it puts the fund on a slightly more expensive side, but still a potentially great option for investment.
TAN - Invesco Solar ETF
Since we talked about FAN above, we may as well also talk a little about TAN. If you're a proponent of solar power and believe that could hold the key to the future, this might be a great fund for you. This fund does not include much diversification with only about 35 companies, but TAN looks to track companies operating in the solar energy industry. This includes anything from companies working to make production of solar panels easier to those actually making the panels. With an expense ratio of 0.71% it puts the fund a little on the expensive side, but recently it has seen tremendous growth with a 26 week return of 170%.
ESGV - Vanguard ESG U.S. Stock ETF
Vanguard's ESGV ETF is a passively managed index fund compiled of over 1,400 US companies of large, mid, and small capitalization stocks. There are several levels of approval that must be met in order for companies to be considered for availability to ESGV. The fund actively avoids any businesses operating in the adult entertainment, alcohol, tobacco, weapons, fossil fuels, gambling, and nuclear power. In addition, certain environmental, social and governance criteria must be met as well as U.N. standards. Since its inception in September of 2018 the fund has seen an average annualized growth rate of 12.49%. With a very low expense ratio of 0.12% it could make a great option for anyone looking to build a portfolio for the future.