The AI (ChatGPT) ESG Stock Investing Guide: iShares ESG Aware MSCI EM ETF (ESGE)

Here is the response from ChatGPT for the prompt iShares ESG Aware MSCI EM ETF (ESGE) 500 words entered on April 30, 2023

iShares ESG Aware MSCI EM ETF (ESGE) is an exchange-traded fund that provides investors with exposure to emerging market companies with high environmental, social, and governance (ESG) ratings. The fund is designed to offer investors an opportunity to invest in companies that are making progress towards sustainable business practices.

ESGE tracks the MSCI Emerging Markets ESG Focus Index, which is designed to provide exposure to emerging market companies that have high ESG ratings while excluding companies that are involved in certain controversial activities. The companies in the index are evaluated based on their ESG performance relative to their industry peers, with a focus on material ESG issues. The index also aims to maintain similar risk and return characteristics to the MSCI Emerging Markets Index, making it a suitable core holding for investors seeking to integrate ESG considerations into their portfolios.

As of April 2023, ESGE has approximately $7.4 billion in assets under management and a net expense ratio of 0.25%, which is lower than the industry average. This makes ESGE an attractive option for investors who want exposure to emerging market companies with high ESG ratings without paying high fees.

ESGE's top holdings include well-known companies such as Taiwan Semiconductor Manufacturing, Samsung Electronics, and Alibaba Group Holding, which have strong ESG ratings and are leaders in sustainable practices. The fund is also diversified across various sectors, with information technology, financials, and consumer discretionary sectors making up the largest holdings.

One of the advantages of ESGE is its focus on companies with high ESG ratings, which may lead to better long-term performance compared to traditional emerging market ETFs. Studies have shown that companies with strong ESG ratings tend to have lower risk and better financial performance over the long term, as they are better equipped to manage environmental and social risks, attract and retain talent, and innovate for the future.

Another advantage of ESGE is its exclusion of companies involved in controversial activities, which may appeal to socially conscious investors who want to align their investments with their values. This screening process ensures that the fund invests in companies that have a positive impact on society and the environment, while avoiding those that engage in activities that may be harmful.

However, one potential downside of ESGE is that it excludes some companies that are included in the MSCI Emerging Markets Index, which may result in lower diversification compared to other emerging market ETFs. This may lead to higher volatility and greater potential for losses in the short term.

In terms of performance, ESGE has performed well since its inception in 2016, with returns that are generally in line with the broader emerging market equity market. However, as with any investment, past performance is not a guarantee of future results.

Overall, iShares ESG Aware MSCI EM ETF (ESGE) is a good option for investors who want exposure to emerging market companies with high ESG ratings and value a screening process that excludes companies involved in controversial activities. The fund's low cost and similarity to the MSCI Emerging Markets Index make it an attractive option for investors who want to integrate ESG considerations into their portfolios without sacrificing diversification or returns. As with any investment, investors should carefully consider their investment goals, risk tolerance, and other factors before investing in ESGE or any other ETF.

Table and Chart of ESGE Performance (From buyupside.com. Not from chatGPT.)

See what a $1,000 investment in iShares ESG Aware MSCI EM ETF (ESGE) is worth today.

Values are based on monthly closes adjusted for splits and dividends from Alpha Vantage.