iShares MSCI USA ESG Select Is Rocking It
This member of the Kiplinger ETF 20 held up better than the broad market during the recent bear-market sell-off, and the fund has rebounded faster, too.


Funds that focus on sustainable stocks are killing it this year. Consider iShares MSCI USA ESG Select (SUSA), one of the Kiplinger ETF 20, the list of our favorite exchange-traded funds. Over the past 12 months, the ETF has gained 28.8%, which beat the 21.4% return of the S&P 500 index. It outpaced 84% of all ETFs that invest in large companies, too.
The MSCI USA ESG Select ETF holds stocks in companies that win the highest marks for environmental, social and governance factors. Scoring well involves much more than tree-hugging. Firms that shine in ESG terms tend to be mindful of their environmental impact, but they also treat employees, customers and their community well, and they have a diverse pool of ethical managers who are aligned with shareholder interests.
Over time, the thinking goes, these firms will perform well because such characteristics point to businesses that are well managed. MSCI USA ESG Select, the oldest ESG-focused ETF in the country, has a 15-year annualized return of 9.3%. That narrowly missed beating the S&P 500, by an average of 0.3 percentage point per year. (The fund has a 0.25% annual expense ratio.)

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But what’s noteworthy is that MSCI USA ESG Select held up better than the broad market during the recent bear-market sell-off, and the fund has rebounded faster since the market bottomed, too. “We found a resilience and a stability in ESG funds and indexes this year,” says Sarah Kjellberg, head of iShares U.S. sustainable ETFs.
The ETF, which holds 157 stocks, is designed to stay roughly in line with the sector allocation of its benchmark, the MSCI USA index. But the fund has some wiggle room, and that’s one reason it has done so well this year.
The ETF holds more of its assets in tech stocks than the broad market, for starters. Nearly 29% of the ETF’s assets are devoted to technology, compared with 25% in the S&P 500. The fund’s hefty stakes in Apple (AAPL) (4.8% of assets), cloud-based software company Salesforce.com (CRM) (3.2% of assets) and graphics-chip designer Nvidia (NVDA) (2.0% of assets), all of which have soared recently, have boosted the fund’s performance. MSCI USA ESG Select holds fewer financial stocks than the benchmark, too, which also helped. Those shares have been among the worst performers—second only to energy shares—in the broad market this year.
Interest in ESG funds is increasing. Kjellberg says the firm has seen record inflows of assets globally into its ESG funds over the past two years. Now more than ever, “investors consider ESG funds as core positions for their portfolio,” she says, instead of as a satellite position that focuses, say, on clean-energy stocks. “This is something new we’re seeing in terms of how investors are embracing ESG.”
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.
-
How Five States Are Worse Off After Trump’s Cuts to SNAP and Medicaid
State Tax Due to Trump's new tax law, some states will experience a greater impact than others.
-
Happiness Improves at Age 50, Right? Maybe Not for Everyone
New thinking about how happiness changes over our lifetimes shows that one group in particular gains the most contentment after age 50.
-
Dow Rises 585 Points on Rate Cut Hope: Stock Market Today
Stocks moved more than 1% again Monday, this time to the upside following the Jobs Friday sell-off.
-
Dow Dives 542 Points on Soft Jobs Data: Stock Market Today
The last day of a busy week ends with the first greater-than-1% move in either direction in more than a month.
-
Stocks Can't Hold Meta, Microsoft Gains: Stock Market Today
The main indexes all opened higher Thursday on impressive Big Tech earnings, but momentum faded into the close.
-
How to Invest for a Fall Interest Rate Cut by the Fed
A lot can happen between now and then, but the probability the Fed cuts interest rates in September is back above 80%.
-
Stocks Are Up and Down on Fed Day: Stock Market Today
In another sign of changing times, JPMorgan has partnered with Coinbase to enable cryptocurrency purchases with credit cards.
-
UnitedHealth Stock Drags on Dow: Stock Market Today
Corporate earnings have dominated Wall Street's attention this week, but that changes on Wednesday.
-
Stocks Close Mixed to Start Fed Week: Stock Market Today
News of an EU-U.S. trade deal was met with muted reaction from market participants who are looking ahead to a jam-packed week.
-
Stocks Rise After Trump-Powell Fed Tour: Stock Market Today
Nvidia hit a new all-time high intraday, but another renowned semiconductor name and some less iconic stocks were bigger movers Friday.