iShares Adds US ESG ETF

Fund methodology takes a sector-based approach to evaluating companies.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

Today BlackRock rolled out an ETF targeting companies ranking in the top half of their peer group regarding environmental, social and governance (ESG) issues. The iShares ESG MSCI USA Leaders ETF (SUSL) tracks the MSCI USA Extended ESG Leaders Index.

SUSL comes with an expense ratio of 0.15% and lists on the Nasdaq stock exchange.

The fund’s underlying index methodology excludes companies involved in industries such as alcohol or weapons as well as companies involved in significant business controversies.

MSCI scores companies based on their ESG characteristics and level of controversy, screening out those ranking in the bottom third regarding controversy, and selecting companies with the highest ESG scores relative to their sector peers until half of the original sector’s free-float market capitalization is represented, according to the prospectus.

The document notes that, as of the end of March, SUSL’s index included 337 components.

The product appears to be very similar to the Xtrackers MSCI U.S.A. ESG Leaders Equity ETF (USSG), which implements virtually the same index methodology and has a similar number of components. USSG comes with an expense ratio of 0.10%, and has nearly $900 million in assets under management after launching in early March.

Contact Heather Bell at [email protected]

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.