4 min readBy Ron Koren ETF Insider
How does the SDGS ETF work?
The SDGS ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The SDG ETF seeks to track the investment results of the MSCI ACWI Sustainable Impact Index, developed by MSCI Inc., a leading index provider. This index exclusively comprises companies that address major social and environmental challenges outlined by the United Nations Sustainable Development Goals (UN SDGs). To be included in the index, companies must generate at least 50% of their annual sales from sustainable impact categories and meet minimum environmental, social, and governance (ESG) standards. The index includes companies from 26 countries and regions, primarily in sectors like consumer staples, healthcare, and industrials, reflecting its commitment to sustainability and responsible investing.
While the primary focus of the iShares MSCI Global Sustainable Development Goals may not be on dividends, it still reflects the dividend distribution of the underlying MSCI ACWI Sustainable Impact Index. These distributions typically occur on a periodic basis and are influenced by the eligible companies' adherence to sustainability criteria and ESG standards. To be included in the index, companies must generate at least 50% of their annual sales from sustainable impact categories as defined by the United Nations Sustainable Development Goals (UN SDGs). Investors in iShares MSCI Global Sustainable Development Goals may benefit from potential capital appreciation while supporting sustainable and socially responsible investment initiatives.
Tracking the MSCI ACWI Sustainable Impact Index is the primary objective of the SDG Tracking ETF. This index has been developed by MSCI Inc. and exclusively comprises companies whose core business addresses at least one of the world's major social and environmental challenges, as defined by the United Nations Sustainable Development Goals (UN SDGs). Eligible companies must generate at least 50% of their annual sales from sustainable impact categories and maintain minimum environmental, social, and governance (ESG) standards. As of August 31, 2022, the index included securities from 26 countries and regions, spanning various industries. The SDG Tracking ETF aims to closely replicate this index, offering investors exposure to socially and environmentally responsible companies while adopting a passive indexing approach to achieve its investment objective.
The correlation aspect of the iShares MSCI Global Sustainable Development Goals is a crucial factor to consider when evaluating its performance. This ETF seeks to track the MSCI ACWI Sustainable Impact Index, which comprises companies addressing major social and environmental challenges defined by the United Nations Sustainable Development Goals (UN SDGs). The correlation of this ETF is expected to align with the overall performance and impact of companies within the sustainable impact categories, making it an important tool for investors interested in socially responsible investing. To study its correlations and gain deep insights, investors can use the ETF Insider web app, which offers simple visualization tools and data on how the ETF overlaps with various UN SDGs and sectors, aiding in informed investment decisions.
The SDG Sector ETF seeks to replicate the performance of the MSCI ACWI Sustainable Impact Index, which comprises companies dedicated to addressing major global social and environmental challenges in alignment with the United Nations Sustainable Development Goals (UN SDGs). This ETF primarily invests in companies within various sectors, including consumer staples, healthcare, and industrials, that generate at least 50% of their annual sales from sustainable impact categories such as nutritious food, treatment of major diseases, energy efficiency, and more. SDG Sector ETF offers investors an opportunity to support socially responsible investments while potentially benefiting from long-term growth trends in sustainable industries.
The SDG Exposure ETF focuses on tracking the MSCI ACWI Sustainable Impact Index, designed by MSCI Inc. This index exclusively comprises companies addressing major global social and environmental challenges aligned with the United Nations Sustainable Development Goals (UN SDGs). Companies eligible for inclusion must generate at least 50% of their annual sales from sustainable impact categories such as nutritious food, healthcare, and pollution prevention. As of August 31, 2022, the Underlying Index consisted of companies from 26 countries, primarily in consumer staples, healthcare, and industrials sectors. Investors looking to align their portfolios with sustainable impact goals can utilize this ETF to gain exposure to companies actively contributing to global sustainability efforts.
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