Top Sustainable Companies and Funds for 2024

Sustainable ETFs for Sustainable Investors. More… It also covers top Zacks ranking alternative energy stocks such as Talen Energy Corporation.

By Ron Robins, MBA

Transcript & Links, Episode 140, October 18, 2024

Hello, Ron Robins here. Welcome to this podcast episode 140 published October 18, 2024, titled “Top Sustainable Companies and Funds for 2024.” It’s presented by Investing for the Soul. Investingforthesoul.com is your site for vital global ethical and sustainable investing mentoring, news, commentary, information, and resources.

Remember that you can find a full transcript and links to content – including stock symbols and bonus material – on this episode’s podcast page at investingforthesoul.com/podcasts.

Also, a reminder. I do not evaluate any of the stocks or funds mentioned in these podcasts, and I don’t receive any compensation from anyone covered in these podcasts. Furthermore, I will reveal any investments I have in the investments mentioned herein.

Additionally, quotes about individual companies are brief. Please go to this podcast's webpage for links to the articles and more company and stock information.

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10 Climate & ESG Investment Funds to Know About

Now, I’m leading this podcast with this article titled 10 Climate & ESG Investment Funds to Know About. It’s by Trinity Sparke and can be seen on onegreenplanet.org. Here’s some of what Ms. Sparke says about her picks.

“1. The Brown Advisory Sustainable Growth Fund (BAFWX)

The Brown Advisory Sustainable Growth Fund, part of the Brown Advisory Funds family, boasts total assets of $9.9 billion as of June 30, 2024. This large growth fund has consistently aimed to deliver significant returns while aligning with sustainable investment principles. Over the past year, it has achieved an impressive return of 17.11%.

2. Nuveen Winslow Large-Cap Growth ESG ETF (NWLG)

With a focus on long-term capital appreciation, the Nuveen Winslow Large-Cap Growth ESG ETF seeks out high-quality companies that demonstrate above-average earnings growth potential…

The fund takes an integrated approach to ESG investing, incorporating environmental, social, and governance considerations, as well as assessing controversy inputs to mitigate risks.

3. Praxis Growth Index Fund (MMDEX)

The Praxis Growth Index Fund is designed to pursue capital appreciation through a thoughtfully curated portfolio of stocks that mirror the performance of the U.S. large-cap growth equity market. It operates under a stewardship investing framework, incorporating responsible investment criteria into its selection process… The Praxis Growth Index Fund is ideal for investors looking to balance growth potential with ethical investing.

4. Vanguard ESG U.S. Stock ETF (ESGV)

The Vanguard ESG U.S. Stock ETF stands out with its low expense ratio of just 0.09% and an appealing dividend yield of 1.08%. Since its inception in September 2018, the fund has delivered an average annual return of 13.31%. With nearly 1,500 holdings, the ETF offers a highly diversified portfolio predominantly composed of U.S. stocks… The Vanguard ESG U.S. Stock ETF is an excellent choice for investors seeking growth alongside sustainability.

5. Pimco Enhanced Short Maturity Active ESG ETF (EMNT)

The Pimco Enhanced Short Maturity Active ESG ETF is designed to preserve capital while maximizing income for its investors. With an expense ratio of 0.24% and an appealing dividend yield of 5.05%, this actively managed ETF emphasizes high-quality, short-term, dollar-denominated debt… [This fund] focuses on securities from issuers whose ESG practices align with PIMCO’s investment strategy, making it a strong option for socially conscious investors.

6. iShares MSCI Global Sustainable Development Goals ETF (SDG)

The iShares MSCI Global Sustainable Development Goals ETF is dedicated to investing in companies that contribute positively to addressing significant social and environmental challenges, as identified by the United Nations Sustainable Development Goals. With an expense ratio of 0.49% and a dividend yield of 1.82%, this fund has delivered an impressive average annual return of 8.16% since its inception in April 2016.

7. Fidelity U.S. Sustainability Index Fund (FITLX)

The Fidelity U.S. Sustainability Index Fund offers a cost-effective option for ESG investors, featuring an impressively low expense ratio of 0.11% and a dividend yield of 0.99%. This passive index fund is designed to track the MSCI USA ESG Index, providing broad exposure to a diverse array of U.S. companies across various industries and market capitalizations. As of the latest data, [this fund] has delivered a robust average annual return of 15.65% over the past five years…

The Fidelity U.S. Sustainability Index Fund has outperformed its large-cap blend category average over the past two, three, and five years.

8. Calvert US Mid Cap Core Responsible Index Fund (CMJAX)

Established nearly 50 years ago, the Calvert US Mid Cap Core Responsible Index Fund is a strong contender for investors seeking significant exposure to mid-cap stocks. With an expense ratio of 0.49% and a dividend yield of 0.81%, this fund emphasizes responsible investing in businesses committed to positive social and environmental practices… Over the past five years, [the fund] has achieved an average annual return of 9.48%.

9. BlackRock Sustainable Advantage CoreAlpha Bond Fund (BIAAX)

The BlackRock Sustainable Advantage CoreAlpha Bond Fund offers an actively managed approach to fixed-income investing, emphasizing bonds that not only provide income but also have the potential for positive societal impact. With an expense ratio of 0.54% and a dividend yield of 3.78%, this fund aims to balance capital appreciation with income generation. However, it has faced challenges in the current interest rate environment, with an average annual return of -0.47% over the past five years.

10. American Century Sustainable Growth ETF (ESGY)

The American Century Sustainable Growth ETF is designed to provide a total return that surpasses its benchmark over market cycles by employing a growth-oriented U.S. equity strategy that integrates environmental, social, and governance (ESG) factors. As of September 27, 2024, the fund boasts a year-to-date total return of 34.45%, reflecting its strong performance in a competitive market.”

End quotes

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The 10 Largest Funds Aligned to Sustainable Development Goals

The second article I’m covering might appeal to European investors in particular. It’s titled The 10 Largest Funds Aligned to Sustainable Development Goals by Liz Angeles and found on morningstar.com. Note: the ESG Risk Rating Assessments below. Five globes are the best, and one globe is the worst.

“1. Northern Trust UCITs Common Contractual Fund — NT World SDG Screened Low Carbon Index Fund A EUR ACC

Morningstar Rating: 5 Stars

ESG Risk Rating Assessment: 4 Globes

The investment objective of the fund is to closely match the risk and return characteristics of the MSCI World Select ESG Leaders Low Carbon Impact G Series Index with net dividends reinvested…

2. DWS Invest SDG Global Equities XC

Morningstar Rating: 4 Stars

ESG Risk Rating Assessment: 4 Globes

While it does not have as its objective a sustainable investment, it will invest a minimum proportion of its assets in sustainable investments as defined by the EU’s Sustainable Finance Disclosure Regulation… The subfund is actively managed and is not managed in reference to a benchmark, according to fund literature.

3. NT Europe SDG Screened Low Carbon Idx Fd A EUR Inc

Morningstar Rating: 4 Stars

ESG Risk Rating Assessment: 4 Globes

The investment objective of the fund is to closely match the risk and return characteristics of the MSCI Europe Select ESG Leaders Low Carbon Impact G Series Index with net dividends reinvested, according to fund literature…

Over the past two years, it beat the category index by an annualized 2.1 percentage points and outperformed the category average by 4.6 percentage points. And more importantly, when looking across a longer horizon, the strategy outpaced the index, according to Morningstar Manager Research.

4. Robeco Global SDG Engagement Equities I EUR Capitalisation

Morningstar Rating: 2 Stars

ESG Risk Rating Assessment: 3 Globes

The subfund aims to provide long-term capital growth while at the same time promoting certain ESG characteristics and integrating sustainability risks in the investment process. A primary objective is to drive a clear and measurable improvement in a company’s contribution to the United Nations Sustainable Development Goals over three to five years.

5. Federated Hermes SDG Engagement Equity Fund Class X USD Accumulating

Morningstar Rating: 3 Stars

ESG Risk Rating Assessment: 3 Globes

The investment objective of the fund is to provide long-term capital appreciation alongside positive societal impact. The fund will seek to achieve its investment objective over a rolling period of any five years, by investing at least 80% in equity and/or equity-related securities of, or relating to, small- and mid-capitalization companies domiciled in, or that derive their income from, developed and emerging markets, according to fund literature.

6. Northern Trust UCITS FGR Fund—Emerging Markets SDG Screened Low Carbon Index FGR Fund A EUR Dis

Morningstar Rating: Not available

ESG Risk Rating Assessment: 4 Globes

The investment objective of the fund is to closely match the risk and return characteristics of the MSCI Emerging Markets Select ESG Leaders Low Carbon Impact G Series Index with net dividends reinvested…

The fund aims to avoid or minimize holdings in companies breaching international norms, including the U.N. Global Compact or the Universal Declaration of Human Rights, according to Morningstar Manager Research.

7. Northern Trust UCITS FGR Fund — North America SDG Screened Low Carbon Index FGR Fund A EUR

Morningstar Rating: Not available

ESG Risk Rating Assessment: 5 Globes

The investment objective of the fund is to closely match the risk and return characteristics of the MSCI North America Select ESG Leaders Low Carbon Impact G Series with net dividends reinvested.

8. CT (Lux) SDG Engagement Global Equity XR EUR Acc

Morningstar Rating: 4 Stars

ESG Risk Rating Assessment: 5 Globes

The portfolio aims to achieve long-term capital growth and support sustainable development, according to fund literature…

The fund aims to avoid, or limit exposure to, companies in violation with international norms, such as the U.N. Global Compact or the Universal Declaration of Human Rights. No companies held by this fund are recognized as being involved in controversies at a high or severe level, according to Morningstar Manager Research.

9. NEF Ethical Global Trends SDG I Cap

Morningstar Rating: 3 Stars

ESG Risk Rating Assessment: 2 Globes

The subfund seeks an attractive long-term rate of return, measured in euros, through investment primarily in equity securities of companies domiciled in developed countries, but investment may be made in equity securities of companies domiciled in emerging countries. The subfund seeks to invest mainly in stocks issued by companies with high-quality ESG profiles and that contribute to the achievement of the Sustainable Development Goals as defined by the United Nations, according to fund literature.

10. Northern Trust UCITS FGR Fund — Europe SDG Screened Low Carbon Index FGR Fund A EUR

Morningstar Rating: 4 Stars

ESG Risk Rating Assessment: 4 Globes

The investment objective of the fund is to invest at least 85% of its assets in the master fund, the investment objective of which is to closely match the risk and return characteristics of the MSCI Europe Select ESG Leaders Low Carbon Impact G Series Index with net dividends reinvested…

The fund aims to avoid, or limit exposure to, companies in violation with international norms, such as the U.N. Global Compact or the Universal Declaration of Human Rights.”

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IBD's 100 Most Sustainable Companies For 2024

This third article is about one of my favorite companies' rankings. It’s titled IBD's 100 Most Sustainable Companies For 2024. It’s by Annie Stanley and found on investors.com. Here are some quotes from Ms. Stanley.

“More than three quarters (77%) of individual investors around the world say they want to invest in companies or funds that aim to achieve market-rate financial returns while also considering positive social and/or environmental impact, according to a recent report from Morgan Stanley…

To build IBD's 2024 list of the 100 Most Sustainable Companies, we started with Morningstar's U.S. and global Low Carbon Transition Leaders Indexes… The indexes target the best-scoring 50% of companies from each sector, by market capitalization…

We selected the companies with the highest IBD Composite Rating — all with scores of 80 or better, putting them in the top 20%. Finally, we ranked the companies by the climate management score, using the IBD Composite Rating to break any ties.

Topping the list this year is Moody's (MCO), demonstrating that a company that provides data on ESG factors can itself be a model of sustainability best practices. U.S. gas and electric utility Southern Co. (SO) is next on the list, and consumer giant Colgate-Palmolive (CL) is third…

Two more utility companies, Alliant Energy (LNT) and NRG Energy (NRG), finished fourth and fifth, respectively, on this year's IBD 100 Most Sustainable Companies list.”

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Additional Articles

1. Title: Sustainable Investing Replaces ESG. See The Top Green Stocks By Industry Category on investors.com. By Annie Stanley.

2. Title: The top 10 best-performing ESG funds of the decade on financial-planning.com. By Rob Burgess.

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Ending Comment

These are my top news stories with their stock and fund tips for this podcast “Top Sustainable Companies and Funds for 2024.”

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© 2024 Ron Robins, Investing for the Soul