EFIV ETF

EFIV focuses on S&P 500 stocks that meet ESG standards and has a reasonable expense ratio of 0.10%, which is a bit higher than the Vanguard ESG US Stock ETF. Since it started in 2020, the ETF has done better than the S&P 500, mainly due to its strong investment in large tech companies like Microsoft, Apple, and Nvidia. In the future, EFIV's performance is expected to be similar to the S&P 500, but it might lag behind if smaller tech stocks perform better in a low-interest-rate environment.

S&P 500 ETFs have performed strongly over the long run. However, you can achieve quicker growth with these two specific growth ETFs.

ESG investing is still increasing, even though it's hard to clearly define which companies are ESG-friendly. The SPDR S&P 500 ESG ETF follows the S&P 500 ESG Index, excluding companies that don't meet ESG criteria. While the fund offers wide market access with an ESG focus, there are worries about how accurately ESG is defined and the risk of underperforming.

The EFIV ETF has produced superior returns to the S&P 500 with a lower standard deviation since its inception, and is recommended as a buy for long-term investors. The source of outperformance is a quality screen that the S&P performs for a nominal fee. This screen reviews and ranks corporations on the basis of their ESG practices. Academic studies show that ESG practices lead to superior financial performance for individual companies for metrics such as ROA, ROE, and the performance of their equity.

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