The iShares ESG Select Screened S&P 500 ETF (XVV) employs a strategy rooted in the S&P 500 Sustainability Screened Index, offering an exceptionally low expense ratio of merely 8 basis points. Launched in September 2020, XVV has shown a stronger performance compared to ESGU, though it has not kept pace with IVV and EFIV. Notably, XVV exhibits superior growth and quality attributes when juxtaposed with IVV, a phenomenon partly attributable to its substantial allocation to NVIDIA (NVDA).
Despite these advantages, the ETF's 'Hold' recommendation stems from certain areas of concern. These include nuances related to its liquidity, which could impact ease of trading, and some instances where its performance has not met expectations. Consequently, while XVV presents a compelling option for those prioritizing environmental, social, and governance factors in their investments, these underlying issues warrant a cautious approach rather than an outright endorsement for buying.
Overall, for investors committed to ESG principles, XVV merits consideration for its strategic alignment and competitive fee structure. Nevertheless, a comprehensive evaluation must also weigh its liquidity profile and past performance inconsistencies. Engaging with investment opportunities like XVV, which align with ethical considerations, allows individuals to contribute positively while pursuing financial growth. This approach fosters a more responsible and sustainable financial landscape, reflecting a commitment to both prosperity and principled investing.
