To The Moon

🌟🌟🌟If you are new to the term, ESG stands for Environmental, Social and Governance.  ESG translates into 3 core fundamentals - Profit, People and the Planet.  It is about assessing how a company 's operations are impacting the world and ensuring that its actions are aligned with the fundamental values of transparency, honesty and safeguarding the world for its future generations.

$iShares ESG Screened S&P 500 ETF(XVV)$ seeks to track the investment results of an index composed of the best and largest US Equities while applying screens for company involvement in controversies and controversial business activities.  These include controversial weapons, small arms, tobacco, oil and shale energy, thermal coal and fossil fuel reserves. 

The Top 10 holdings include 6 of the Magnificent 7 stocks - $Apple(AAPL)$  $NVIDIA Corp(NVDA)$  $Microsoft(MSFT)$  Amazon, Meta Platforms, Alphabet.  In addition to that, there is Berkshire Hathaway, Eli Lilly and Broadcom. 

The Top 10 weightage is 37.8%. Total number of holdings is 445.  The expense ratio is a low 0.08% which is the lowest among similar competing ESG Screened ETFs. 

The Dividend yield is 1.1% paid every 3 months.  XVV goes ex dividend on September 25 2024.

The mega caps keep growing.  Microsoft, Nvidia, Apple, Alphabet, Amazon and Meta Platforms now make up more than 30% of the S&P500.  This is unprecedented in history.   The common denominator among the 6 is their dominance in the AI arena.  

Among the 6, Nvidia leads the pack as its share  price has jumped 160% year todate due to its key role in producing its specialised AI chips which are in such high demand.  The other 5 - Microsoft, Apple, Alphabet, Amazon and Meta Platforms even buy these chips from Nvidia.  All 6 companies are over a Trillion dollars in market cap. 

$Berkshire Hathaway(BRK.B)$  , Warren Buffett's flagship company is on the cusp of reaching USD 1 Trillion in market capitalisation.  Its current market capitalisation is 993.89 Billion.   Berkshire is also sitting on a huge pile of cash - A record USD 276.9 billion in the 2nd quarter of 2024.   Berkshire has been trimming its stock holdings by selling some of its Apple and Bank of America's shares.  This could be due to Warren Buffett 's thinking that the market is currently overpriced and suggests that he is trying to set Berkshire up to take advantage of a market downturn. 

$Eli Lilly(LLY)$  's share price is on a tear in 2024.  It is up 60% year todate due to its dominance in weight loss drugs Mounjaro and Zepbound.  Eli Lilly is another future  candidate to join the Trillion Dollar Club with its current market capitalisation of USD 901.90 billion. 

Broadcom is a US developer, manufacturer and global supplier of a wide range of semiconductors and infrastructure software products.  Broadcom is the latest market giant to launch a 10 for 1 stock split in July this year.  Its revenue has climbed thanks to AI demand.  Broadcom's share price is up 45% year todate. 

Looking at the above performance of XVV 's Top 10 holdings, it is not surprising that its share price has been doing well. 

Performance wise XVV is up 19% year todate and 27% in 2023.  However if we look further back to its inception on September 22 2020, XVV has jumped 70%.  In comparison, $SPDR S&P 500 ETF Trust(SPY)$  is up 18% year todate and 26% in 2023.  So XVV has performed slightly better than SPY in both years. 

Wall Street Analysts are bullish on XVV with a Buy rating rating, Target price of USD 47.94, an upside potential of 11% according to 446 analysts surveyed by Tipranks. 

I have invested in XVV since 2023 and seen it grow slow and steadily during this period.  I believe that companies that perform well on ESG are less risky, better positioned for the long term and better prepared for uncertainities ahead. These ESG aligned companies may also have a competitive advantage over those that ignore ESG compliance in the long term. 

I like XVV ETF as it is low cost and well diversified and offers me great value for my money.  XVV also aligns with my values for a cleaner, greener and better world for our future generations. 

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