ESGU - Market for ESG ETFs shrinks with more closures and fewer launches in 2023

2023-05-09 12:10:22 ET

The market for ESG-focused exchange traded funds has shrunk in 2023, with fewer launches and more fund closures within the category.

Through the first quarter of 2023, Wall Street saw the launch of 58 ETFs within the category designated as "environmental, social and governance." This was down sharply from total seen in the same period last year, when 101 ESG funds debuted. At the same time, fund closures for ESG ETFs have already surpassed last year's levels for this time of year.

Meanwhile, high-profile funds in the space have experienced significant outflows. The iShares ESG Aware MSCI USA ETF ( NASDAQ: ESGU ), which is the world’s largest ESG ETF with $13.42B in assets under management, suffered the second largest outflows in 2023 compared to all other ETFs on the market. ESGU watched $7.37B worth of investor capital head for the doors in 2023.

Year-to-date price action: ESGU +7.3% .

For reference, see some of ESGU’s competitor funds and how they all fared against each other over a longer one-year period.

• BlackRock U.S. Carbon Transition Readiness ETF ( NYSEARCA: LCTU )
• Columbia International ESG Equity Income ETF ( NYSEARCA: ESGN )
• FlexShares STOXX US ESG Select Index Fund ETF ( BATS: ESG )
• First Trust EIP Carbon Impact ETF ( ECLN )
• FlexShares STOXX Global ESG Select Index Fund ETF ( ESGG )

More on ESG:

• BlackRock plans to launch a climate transition-focused ETF
• Another climate transition ETF set to launch
• Popular clean energy ETF ICLN hits a new 6-month low
• World’s largest ESG ETF saw $5B exit in March, leading all ETFs

For further details see: