Best ESG ETFs: emerging markets and climate action ETFs

The best-performing ESG ETFs of last week have been helped along the way by the general rebound in emerging market equities with Latin-American stocks in particular were boosted by greater than expected GDP forecasts in Brazil.

Emerging Markets Stocks ETFs rose the most in ESG universe last week

While a strong theme was shown in the worst performing ESG ETFs of last week, the top performers were generally broad-based with the best-in-class portfolio construction approach representing half of the list.

Top 10 ESG ETFs of the week (Europe):

• Xtrackers MSCI EM Latin America ESG Swap UCITS ETF: Best-in-class: +3,78%
• Xtrackers MSCI Emerging Markets ESG UCITS ETF: Best-in-class: +2,95%
• Lyxor MSCI EM ESG Leaders Extra UCITS ETF: Best-in-class: +2,85%
• JPMorgan ETFs - Global Emerging Markets Research Enhanced Index Equity: General integration: +2,80%
• AMUNDI MSCI EMERGING ESG UNIVERSAL SELECT ETF: General integration: +2,75%
• Fidelity Sustainable Research Enhanced Emerging Markets Equity ETF: General integration: +2,69%
• WisdomTree Emerging Markets SmallCap Dividend ETF: Exclusion screening: +2,68%
• AMUNDI MSCI EMERGING ESG LEADERS ETF: Best-in-class: +2,66%
• KraneShares MSCI China ESG Leaders ETF: Best-in-class: +2,61%
• HSBC Asia Pacific ex Japan Sustainable Equity ETF: General integration: +2,61%

The best performing ESG ETF of the week in Europe was the Xtrackers MSCI EM Latin America Swap UCITS ETF which tracks the MSCI EM Latin America Low Carbon SRI Leaders Index. This index includes companies that have lower carbon exposure than that of the broader equity market in emerging market countries in Latin America.

This ETF is classified as aligning with UN Sustainable Development Goal 13 – “Climate Action” according to data from Trackinsight’s ESG Observatory.

Top 10 ESG ETFs of the week (North America):

• iShares Indice Carbono Eficiente (ICO2) Brasil ETF: General integration: +4,28%
• It Now ISE ETF: General integration: +2,41%
• NuShares ESG Emerging Markets Equity ETF: General integration: +2,09%
• Xtrackers MSCI Emerging Markets ESG Leaders Equity ETF: Best-in-class: +2,02%
• KraneShares MSCI China ESG Leaders Index ETF: Best-in-class: +1,99%
• SPDR MSCI Emerging Markets Fossil Fuel Reserves Free ETF: Exclusion screening: +1,87%
• WisdomTree Emerging Markets ESG Fund: General integration: +1,76%
• iShares ESG MSCI Mexico ETF: General integration: +1,65%
• Desjardins RI Emerging Markets Low CO2 Index ETF: Best-in-class: +1,34%
• Invesco Global Water ETF: ESG thematic strategy: +0,82%

North American listed ESG ETFs followed a similar pattern as strong performance in emerging markets drove ETFs focused on Brazil to the top of the list. The top performing ESG ETF was the iShares Indice Carbono Eficiente Brasil ETF, returning 4.28%.

This ETF provides exposure to Brazilian companies with low greenhouse gas productions and has a TER of 0.38%.

Want more information on ESG ETFs? Then visit Trackinsight’s ESG Observatory where you can screen the ESG ETFs available in your region, match your investments to United Nations Sustainable Development Goals and find the top-rated ESG funds.