The AI (ChatGPT) ESG Stock Investing Guide: iShares ESG Aware MSCI USA ETF (ESGU)
Here is the response from ChatGPT for the prompt iShares ESG Aware MSCI USA ETF (ESGU) 500 words entered on April 30, 2023
iShares ESG Aware MSCI USA ETF (ESGU) is an exchange-traded fund that provides investors with exposure to US 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.
ESGU tracks the MSCI USA ESG Focus Index, which is designed to provide exposure to US 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 USA Index, making it a suitable core holding for investors seeking to integrate ESG considerations into their portfolios.
Its net expense ratio of 0.15% is lower than the industry average. This makes ESGU an attractive option for investors who want exposure to US companies with high ESG ratings without paying high fees.
As of March 31, 2023, the ESGU fund held investments in 337 different companies, with a total net asset value of over $16.6 billion. The fund's largest holdings were in companies involved in the technology sector, such as Apple Inc., Microsoft Corp., and Amazon.com Inc., as well as companies involved in the healthcare sector, such as Johnson & Johnson and Pfizer Inc.
One of the advantages of ESGU is its focus on companies with high ESG ratings, which may lead to better long-term performance compared to traditional US equity 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 ESGU 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 ESGU is that it excludes some companies that are included in the MSCI USA Index, which may result in lower diversification compared to other US equity ETFs. This may lead to higher volatility and greater potential for losses in the short term.
In terms of performance, ESGU has performed well since its inception in 2016, with returns that are generally in line with the broader US equity market. However, as with any investment, past performance is not a guarantee of future results.
Overall, iShares ESG Aware MSCI USA ETF (ESGU) is a good option for investors who want exposure to US 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 USA 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 ESGU or any other ETF.
Table and Chart of ESGU Performance (From buyupside.com. Not from chatGPT.)
See what a $1,000 investment in iShares ESG Aware MSCI USA ETF (ESGU) is worth today.
Values are based on monthly closes adjusted for splits and dividends from Alpha Vantage.
|Current Value of $1,000 Purchase||$2,034|
|Number Profitable Returns||2,599|
|Percent Profitable Returns||88.82%|
|Number Unprofitable Returns||327|
|Percent Unprofitable Returns||11.18%|
|Profitable to Unprofitable Returns Ratio||7.95|