June 2025’s Best and Cheapest ESG ETFs to Watch
As more investors look to align their portfolios with their values, ESG investing, which focuses on environmental, social, and governance factors, is rapidly gaining momentum. Among the most popular vehicles for this kind of investment are ESG ETFs, or exchange-traded funds that bundle together ESG-rated stocks.
Not only do ESG ETFs help support sustainable businesses, but they can also offer strong financial returns and accessible entry points for a wide range of investors.
ESG ETF: What Does it Entail?
An ESG ETF is a fund that invests in companies meeting certain ESG criteria, such as low carbon emissions, ethical governance practices, and socially responsible operations. These funds are diversified across many stocks, reducing individual risk while promoting sustainability.
Unlike traditional mutual funds, ETFs can be traded throughout the day like individual stocks, offering flexibility along with value-based investing.
7 Best-Performing ESG ETFs: June 2025
If you’re aiming for growth while keeping sustainability in mind, these are seven of the top-performing ESG ETFs over the past year:
- Stance Sustainable Beta ETF (Ticker: CHGX, Annual Return: 74.11%)
- Franklin Responsibly Sourced Gold ETF (Ticker: FGDL, Annual Return: 43.64%)
- Rayliant Quantitative Developed Market Equity ETF (Ticker: RAYD, Annual Return: 20.02%)
- Nuveen Winslow Large-Cap Growth ESG ETF (Ticker: NWLG, Annual Return: 18.83%)
- iShares ESG Aware MSCI USA Growth ETF (Ticker: EGUS, Annual Return: 16.52%)
- Dimensional International Sustainability Core 1 ETF (Ticker: DFSI, Annual Return: 16.46%)
- Avantis Responsible International Equity ETF (Ticker: AVSD, Annual Return: 15.18%)
These funds focus on companies with strong sustainability practices and have delivered solid returns, demonstrating that ESG investing can also be profitable.
Read More: BNP Paribas AM Launches ESG-Focused Equal Weight ETF
7 Cheapest ESG ETFs to Consider
Sustainable investing doesn’t have to come with a high price tag. For cost-conscious investors, these low-cost ESG ETFs offer a smart way to integrate ESG into a diversified portfolio:
- iShares ESG Aware MSCI USA ETF (ESGU)
- Vanguard ESG U.S. Stock ETF (ESGV)
- SPDR S&P 500 ESG ETF (EFIV)
- Xtrackers MSCI USA ESG Leaders Equity ETF (USSG)
- iShares Global Clean Energy ETF (ICLN)
- Nuveen ESG Large-Cap ETF (NULC)
- Fidelity U.S. Sustainability Index Fund (FITLX)
Most of these funds are passively managed, tracking ESG-specific indices to keep expense ratios low while still supporting environmental and social initiatives.
Why ESG Investing Matters
Kenneth Chavis, a certified financial planner, believes ESG investing empowers everyday investors:
“Putting our investment dollars to work in ESG influences the behavior of the largest and most powerful multinational corporations in the world for the greater good of society.”
Beyond ethics, sustainable funds have also shown promise in performance. According to Morgan Stanley’s recent Sustainable Reality report, $100 invested in an ESG fund in 2018 would have grown to $136 by 2024, compared to $131 in a traditional fund.
Also Read: BlackRock’s New ESG ETF Aims for 30% Emissions Cut in Utilities Sector
Choosing the Right ESG ETF
Here are a few things to consider:
- Active vs. Passive: Active ESG funds aim to beat the market but often incur higher fees. Passive funds tend to have lower costs and track an ESG index.
- Personal Impact: Choose funds that align with causes you care about, such as clean energy, diversity, or ethical labor practices.
- Portfolio Fit: Ensure your ESG investments complement your existing asset mix to avoid overexposure.
- Check for Impact Reports: To track real-world effects, look for funds that offer detailed ESG impact reports.
Final Thoughts
Whether you’re motivated by values, performance, or both, ESG ETFs offer a compelling way to invest. With options ranging from top performers to budget-friendly picks, there’s never been a better time to explore ESG investing.
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Source: nerdwallet
