XVV iShares ESG Screened S&P500 ETF Is Rising
๐๐๐ESG is the acronym for Environmental, Social and Governance. It is gaining significant importance as investors and shareholders increasingly consider non-financial factors when making investment decisions. ESG factors help assess the overall sustainability and ethical performance of companies. This can have implications for their long term success and reputation.
$iShares ESG Screened S&P 500 ETF(XVV)$ tracks a market cap weighted index of US Large caps stocks screened for sustainability and excluding those with exposure to certain controversial business activities.
XVV starts with the S&P500 stocks and screens out companies over a certain threshold level of involvement in tobacco, controversial weapons and involvement with fossil fuels.
Companies are also evaluated for governance controversies such as economic crime, corruption, fraud, human rights abuses, labour disputes, work place safety, catastrophic accidents and environmental disasters. Those flagged on any of these issues maybe removed from the index and remain ineligible for reentry for up to 1 year. Exclusions are reviewed at each quarterly rebalance.
The Top 10 holdings include 6 of out the Magnificent 7 - Microsoft, Apple, Nvidia, Amazon, Meta Platforms, Google, Berkshire Hathaway, Eli Lilly and Broadcom. Tesla now stands at Number 11 due to its recent volatility.
The Top 10 holdings weightage is 35.5%. Total number of holdings is 449. The expense ratio is a low 0.08%. Distributions are paid quarterly. The current distribution yield is 1.13%.
Performance wise XVV is up 1.3% in the past 5 days. XVV has now risen by 10.7% year todate and in 2023, XVV has jumped 33%. Since its inception on September 2020 5 years ago, XVV has gained 58%. That is a pretty decent performance for an ETF.
According to Tipranks, the average Target price for XVV is USD 43.06, an upside potential of 7.6%. This is based on 449 Wall Street Analysts 12 month price target from a high of USD 50.59 to a low of USD 35.19.
I like XVV as it is well diversified and minimises my risk on single stocks. It also appeals to my inclination towards a cleaner and greener Earth. ESG is gaining prominence globally and companies that care about ESG are great companies to invest in.
I am currently up 10% in XVV and believe that it will continue to grow slow and steady well into the future.
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Great article