Socially Responsible Investing Is Starting to Beat the Market

Socially responsible investing doesn't sacrifice profits for morals

      View All  
Socially Responsible Investing Is Starting to Beat the Market

Socially Responsible Investing: iShares MSCI USA ESG Select ETF

iShares185 Socially Responsible Investing Is Starting to Beat the MarketFor those investors wanted to eliminate the volatility of owning smaller firms from their portfolios, the iShares MSCI USA ESG Select ETF (KLD) is a solid choice.

The $250 million KLD tracks U.S. large- and mid-cap stocks screened for positive socially responsible investing characteristics and excludes tobacco companies. Index provider MSCI first looks at its broad MSCI USA index — which contains about 250 stocks. The indexer then applies a standard set of criteria to weight each stock, and those with stronger weights get more prominent placement in the new SRI index. That produces a portfolio of 107 different stocks — with top holdings in Apple (AAPL) and renewable energy-focused utility NextEra Energy (NEE).

Overall, technology and financial firms make up the bulk of KLD’s holdings.

Returns for the socially responsible investing fund have been pretty strong. KLD managed to post a nearly 31% total return in 2013. While that did underperform the broad S&P 500, KLD has beaten the benchmark index over the past five years.

Like its sister fund DSI, expenses for KLD run just 0.5%.


Article printed from InvestorPlace Media, http://investorplace.com/2014/03/socially-responsible-investing-sri/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.