Is iShares ESG Aware MSCI USA ETF (ESGU) a Strong ETF Right Now?

Launched on 12/01/2016, the iShares ESG Aware MSCI USA ETF (ESGU) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth category of the market.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexManaged by Blackrock, ESGU has amassed assets over $12.76 billion, making it one of the largest ETFs in the Style Box - All Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA ESG Focus Index.The MSCI USA Extended ESG Focus Index comprises of U.S. companies that have positive environmental, social and governance characteristics while exhibiting risk and return characteristics similar to those of the parent index.Cost & Other ExpensesInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.With one of the least expensive products in the space, this ETF has annual operating expenses of 0.15%.ESGU's 12-month trailing dividend yield is 1.26%.Sector Exposure and Top HoldingsETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.This ETF has heaviest allocation in the Information Technology sector - about 30.90% of the portfolio. Financials and Healthcare round out the top three.Taking into account individual holdings, Apple Inc (AAPL) accounts for about 6.42% of the fund's total assets, followed by Microsoft Corp (MSFT) and Nvidia Corp (NVDA).ESGU's top 10 holdings account for about 34.21% of its total assets under management.Performance and RiskSo far this year, ESGU has lost about -5.92%, and is up roughly 9.26% in the last one year (as of 03/12/2025). During this past 52-week period, the fund has traded between $108.69 and $134.30.The fund has a beta of 1.03 and standard deviation of 17.35% for the trailing three-year period. With about 288 holdings, it effectively diversifies company-specific risk.AlternativesIShares ESG Aware MSCI USA ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.Vanguard ESG U.S. Stock ETF (ESGV) tracks FTSE US ALL CAP CHOICE INDEX and the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) tracks ----------------------------------------. Vanguard ESG U.S. Stock ETF has $9.63 billion in assets, JPMorgan Nasdaq Equity Premium Income ETF has $22.10 billion. ESGV has an expense ratio of 0.09% and JEPQ charges 0.35%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - All Cap Growth.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares ESG Aware MSCI USA ETF (ESGU): ETF Research Reports Apple Inc. (AAPL): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Vanguard ESG U.S. Stock ETF (ESGV): ETF Research Reports JPMorgan Nasdaq Equity Premium Income ETF (JEPQ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks