15 Best ESG Funds for Responsible Investors

ESG, SRI ... call it what you want, but it can take many forms, and stand for different values. These 15 funds give you options.

A lone windmill sits on a grassy plain
(Image credit: Getty Images)

So-called responsible investing can take many forms – as many forms as there are values to stand behind. Are you concerned about reducing fossil fuels? What about promoting women in the workplace? Whether you care about those issues or others, there's likely an ESG (environmental, social and corporate governance) fund for you.

You're not alone, either. Investors' hunger for ESG funds and stocks is growing at a rapid clip. According to Deloitte, the percentage of investors who applied ESG principles to at least a quarter of their portfolios grew from 48% in 2017 to 75% in 2019.

Investor interest in ESG has reached a level where "funds that don’t advance in a material way long-term ESG concern, like climate (change), or important current topics, like racial equity, will agitate current investors who expect them to tackle important issues," says Joe Sinha, chief marketing officer at Parnassus Investments.

There are two main approaches to responsible investing: negative screening and positive screening. In the former, you try to avoid the bad by excluding companies whose values you disagree with; the "sin" industries of tobacco, gambling and guns are frequently separated from the herd. This is how socially responsible investing (SRI) got its start, and it's still a common approach.

Positive screening tries to maximize exposure to companies doing good. This is primarily the realm of ESG funds, which aim to hold stocks with good environmental, social and governance practices. The theory is that ESG-friendly companies won't just make you feel better – they'll perform better, too, thanks to benefits such as cost savings from energy efficiency or better management driven by more diverse leadership.

And 2021 could be a particularly strong year for these funds. "With a new administration coming in, we expect that we'll see a rejoining of various accords and partnerships as well as a refreshed effort on government environmental oversight," Sinha says.

Here are 15 of the best ESG funds for investors looking to put their money where their values are. Most of these picks, which include mutual funds and exchange-traded funds (ETFs) alike, use a combination of SRI exclusion and ESG inclusion. And they cover the gamut, from global large-cap stocks to small American companies to even bonds that are backed by ESG-friendly companies.

In other words: There's something for just about every need.


Data is as of April 19, unless otherwise noted. Yields on equity funds represent the trailing 12-month yield. Yields on balanced and bond funds are SEC yields, which reflect the interest earned after deducting fund expenses for the most recent 30-day period.

Coryanne Hicks
Contributing Writer, Kiplinger.com

Coryanne Hicks is an investing and personal finance journalist specializing in women and millennial investors. Previously, she was a fully licensed financial professional at Fidelity Investments where she helped clients make more informed financial decisions every day. She has ghostwritten financial guidebooks for industry professionals and even a personal memoir. She is passionate about improving financial literacy and believes a little education can go a long way. You can connect with her on Twitter, Instagram or her website, CoryanneHicks.com.