iShares ESG MSCI USA Leaders ETF (SUSL) seeks to track the MSCI USA Extended ESG Focus Index, which measures the performance of large- and mid-cap U.S. companies with high environmental, social, and governance (ESG) ratings while maintaining sector weights similar to the broader U.S. market.
How It Works
SUSL uses a passively managed, market-capitalization-weighted approach that screens the MSCI USA Index for companies with strong ESG characteristics while excluding those involved in controversial business activities like tobacco, weapons, or thermal coal. The fund maintains sector allocations close to the parent index to avoid concentration risk while overweighting ESG leaders within each sector. Rebalancing occurs quarterly to reflect index changes and maintain ESG criteria compliance.
Key Features
- Maintains broad market sector exposure while applying ESG screens, avoiding the sector concentration common in many ESG funds
- Excludes companies with significant revenue from controversial industries like tobacco, weapons manufacturing, and fossil fuel extraction
- Launched by BlackRock with 0.00% expense ratio, making it one of the most cost-effective ESG equity ETFs available
Risks
- This ETF can lose value if ESG-focused companies underperform traditional value or growth stocks during market rotations, potentially lagging broader market returns
- ESG screening eliminates entire sectors and high-performing individual stocks, which could result in missed opportunities during certain market cycles
- As a U.S. equity fund, this ETF will decline during broad market downturns, potentially losing 30-40% in severe bear markets while offering no downside protection
Who Should Own This
Best suited for socially conscious investors with 5+ year time horizons seeking core U.S. equity exposure (20-40% of equity allocation) while maintaining ESG principles. Medium risk tolerance required due to equity volatility. Ideal for investors who want broad market participation without compromising on environmental and social values.