Opinion on ESG ETFs

Investing / Others
1

Dear all

I am looking to get an ESG ETF and I was looking into this: https://www.etf.com/SUSA, it seems performing and not too expensive.

Also this sound interesting (lower TER): https://www.etf.com/SUSL.

Does anyone had experience/opinion of them?

Thank you in advance.

Don

2

I am buying USXF - lower TER, better ESG - for US and DMXF for developed ex-US.

3

Thank you @Dr.PI.
I am putting aside SUSA. USFX looks very good, out of curiosity, do you also buy DMXF for diversification at a global level?

Anyhow I noticed SUSL is too heavy on Microsoft (10%+!) so for now USFX seems the winner.

Thanks
Don

4

Yes, I buy them at the same time. USXF / DMXF in the proportion given by the current share of US in Msci world. You can take VEA instead of DMXF though, Europe and Japan are already good at ESG without extra filtering.

1 Like
5

You should also look at Vanguard products if you want more comparison:

1 Like
6

Thanks, that makes sense. Actually it seems DMXF scores better than VEA at the MSCI ESG Quality Score.

Don

7

I did. Vanguard is great, but their ESG sucks.

1 Like
8

Hi Don,

For Europe I am invested in this ETF:

Note that the number of constituents (only ~50) in this basket’s ETF is not very big such as you usually see with other more broad ETFs.

9

Thank you @mabi that look interesting indeed, at the moment I was looking for a US domiciled one, but I will take this into consideration.

Another one I am interested on, EU based, is this iShares MSCI World SRI UCITS ETF | SUWS

Best
Don

10

Hi @Dr.PI

regarding USXF, is it distributive? And did you find it listed in ICTax - Income & Capital Taxes? (I did not).

Thanks.
Don

11

Interesting, I checked the index behind it (https://www.msci.com/documents/10199/75bae2dd-7f6a-8f05-99dd-d13d145e2e75) and this index seems even to beat slightly the typical MSCI World. Still for me this ETF with nearly 60% USA is too much USA for my taste :stuck_out_tongue:

12

It there an advantage in choosing an US-domiciled ETF to cover European equity / holdings?

Maybe if you have to file taxes in the US. But otherwise…?

13

Correct, I am indeed referring to cheaper taxes.

Best.
Don

14

UBS and ESG? Äähh…
I avoid UBS ETFs because I don’t want to pay anything to those guys.

1 Like
15

Sorry, forgot the crucial „in the US“ in my last post.

But they aren’t cheaper on tax!?

US-domiciled ETFs are usually subject to 15% or 30% withholding tax (although you may often deduct it through the tax declaration as a Swiss-residence investor)

Whereas Irish or Luxembourgish ETFs (usually, for residents of virtually every country) are not subject to withholding tax in the first place?!

Yeah, I prefer good old RS-232 as well.

1 Like
16

I was checking ESG ETFs recently.

From European ETFs, I find SRI too restrictive.

I found Ishares ESG Enhanced a good balance between good ESG and a broad number of stocks.

Ishares ESG Screened is bs, hardly any improvement of ESG rating. Just an alibi ESG.

There are also HSBC Sustainable, which I found good though more expensive than Ishares ESG Enhanced.

I am talking about families of ETFs on different regions.

1 Like
17

There is worse than that, think Credit Suisse :wink:

For this specific ETF I mentioned above (UIMR) the TER is not bad at all at 0.22% and was also quite surprised to see a relatively low TER for an ETF from UBS. Of course nothing to compare with a Vanguard equivalent such as VEA which has a TER of 0.05%…

1 Like
18

I am referring to this: Withholding taxes on dividends received, concrete examples - Mustachian Post (thanks to @_MP) for what I learned US is better vs IE/LU.

The joke on RS-232 and USB is very geeky…

1 Like
19

For dividends from US holdings (companies).

EMU ETFs (as mentioned above) aren’t holding US companies - and won’t receive US dividends.

From a tax perspective, EU-domiciled (Irish or Luxembourgish) ETFs will be easier in handling, more favourable when US withholding tax is not deductible and probably at least as favourable or better than US-domiciled ETFs on a fund level.

…but I just couldn’t resist. :man_shrugging:t2:

3 Likes
20

In in the same situation, I would like to find an ESG version of Vanguard Total World Stock (VT) , US based and I haven’t anything suitable yet. What did you end up choosing for you @San_Francisco.

And @Dr.PI why Vanguard ESG ETFs are bad from your perspective? I am hesitating to pick them up but indeed they aren’t recommended a lot.