Ethos funds are quite expensive. More and more ETFs which are socially responsible are available at low cost. However, there are multiple levels of socially responsible funds and you can get lost easily. I will try to sum up with the MSCI indices:
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MSCI World (1654 stocks): standard index
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MSCI WORLD ESG UNIVERSAL INDEX (1622 stocks selected out of 1654): The index is designed to reflect the performance of an investment strategy that, by tilting away from free-float market cap weights, seeks to gain exposure to those companies demonstrating both a robust ESG profile as well as apositive trend in improving that profile, using minimal exclusions from the MSCI World Index.
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MSCI WORLD ESG SCREENED (1552 stocks selected out of 1654): The index excludes companies from the parent index that are associated with controversial, civilian and nuclear weapons and tobacco, that derive revenues from thermal coal and oil sands extraction and that are not compliant with the
United Nations Global Compact principles. -
MSCI WORLD ESG LEADERS (799 stocks selected out of 1654): The MSCI World ESG Leaders Index is a capitalization weighted index that provides exposure to companies with high Environmental, Social and Governance (ESG) performance relative to their sector peers
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MSCI WORLD SRI INDEX (390 stocks selected out of 1654): The MSCI World SRI Index includes large and mid-cap stocks across 23 Developed Markets (DM) countries. The index is a capitalization weighted index that provides exposure to companies with outstanding Environmental, Social and Governance (ESG) ratings and excludes companies whose products have negative social or environmental impacts
Similar index: MSCI WORLD SRI 5% ISSUER CAPPED INDEX
I don’t know in which universe you are looking, but I would recommend the following ETFs with high ESG score:
- UBS ETF (LU) MSCI World Socially Responsible UCITS ETF (USD) A-dis (unfortunately, this fund is LU based)
- iShares Sustainable MSCI USA SRI UCITS ETF
- iShares MSCI Europe SRI UCITS ETF
- iShares MSCI U.S.A. ESG Select ETF
- iShares ESG MSCI EAFE ETF
For US based ETFs, you can use https://www.etf.com/etfanalytics/etf-finder, the ESG tab displays the ESG score of the fund
The ESG score is strongly dependent on the industry of each country.
Some countries will have automatically better score due to their industry (like Portugal, Netherland). Emerging markets have a lower score, so it would be better to avoid them.
The world Ethos fund is “Ethos - Equities Sustainable World ex CH - E” with a cost of 0.71% including 100 stocks. Is this fund more socially reponsible than UBS ETF (LU) MSCI World Socially Responsible UCITS ETF?. It’s hard to say without an independant comparison. Also Ethos is doing only a comparision on CO2 emision which is only one part of ESG.
Microloans would be riskier than ESG ETFs