What does 'ESG' stand for, and how do these funds apply it?

ESG stands for Environmental, Social, and Governance. These funds screen companies based on sustainability and ethical criteria. However, methodologies differ, meaning one fund might include a company another excludes, despite both carrying an ESG label. Investors should check each fund's documentation to understand their specific screening rules and how they balance ESG alignment with financial objectives.

How do expense ratios affect long-term investment returns?

An expense ratio is an annual fee deducted from a fund's assets. A higher fee reduces net returns over time. For example, comparing a 0.15% and a 0.09% expense ratio, the 0.06 percentage point difference compounds annually. Over decades, this seemingly small gap can significantly impact the final value of an investment, making cost efficiency a key factor in fund selection.

What is index tracking in the context of exchange-traded funds?

Index tracking involves a fund buying securities to match the performance of a specific market benchmark. The goal is to replicate the index's return, not to outperform it. Tracking accuracy depends on how closely the fund's holdings mirror the index. Differences in fees and replication methods can cause slight variations in returns between funds targeting similar indexes.

How do the expense ratios of ESGU and ESGV compare?

ESGU has an expense ratio of 0.15%, while ESGV has an expense ratio of 0.09%. This means ESGV charges 0.06 percentage points less annually. Lower costs generally lead to higher net returns over time, assuming all other factors remain equal. Investors should consider how this fee difference aligns with their overall portfolio cost structure and long-term holding plans.

What are the main holdings shared by ESGU and ESGV?

Both funds share significant top holdings, including NVDA, AAPL, MSFT, AMZN, GOOG, AVGO, META, GOOGL, MU, and TSLA. This overlap indicates similar exposure to major US technology and communication services companies. However, the exact weightings differ slightly, which can lead to minor variations in overall portfolio risk and return profiles despite holding many of the same stocks.

What are the dividend yields for ESGU and ESGV?

ESGU reports a dividend yield of 0.92%, while ESGV reports a yield of 0.86%. These figures represent the annual income generated relative to the fund's current price. Yields fluctuate based on market conditions and company payouts. Both funds offer modest income compared to the broader market, reflecting their focus on growth-oriented sectors like technology.

How do the inception dates and net assets of these funds differ?

ESGU was launched on 1 December 2016 and has $18.0 billion in net assets. ESGV launched later, on 18 September 2018, with $13.7 billion in net assets. A longer operating history can provide more performance data, while larger asset bases often support better liquidity. These factors help investors assess operational stability and trading ease.

Are these funds suitable for income-focused investors?

With yields of 0.92% and 0.86%, neither fund is typically classified as high-income. Income investors often seek higher distributions. These funds are better suited for investors prioritising capital appreciation and ESG alignment over regular cash flow. Investors seeking income might consider bond ETFs or dividend-focused equity funds, though these carry different risk and return characteristics.

What sector exposure do these funds provide?

Both funds provide broad exposure to US large-cap stocks. While specific sector weight data is not available, the high concentration of technology and communication services holdings suggests significant tilt towards these sectors. This can offer growth potential but also increases sensitivity to tech sector volatility. Diversification benefits may be limited compared to more balanced equity indexes.

How can beginners interpret the differences in these two similar funds?

Beginners should focus on fee structures, tracking indexes, and screening methodologies. While both offer US large-cap ESG exposure, differences in cost and specific holdings can impact net returns. Comparing expense ratios and understanding each fund's approach to exclusions helps clarify their unique characteristics. Reviewing official documentation provides deeper insight into how each fund operates.

What should investors know about liquidity in these funds?

Liquidity affects how easily shares can be bought or sold. Both funds have substantial net assets, which generally supports good trading liquidity. However, liquidity can vary during market stress. Investors should monitor bid-ask spreads and trading volume, especially when dealing in larger amounts, to ensure efficient execution and minimise potential transaction costs.

Why might an investor choose one fund over the other?

An investor might choose ESGU for its slightly longer operating history or specific index tracking. Conversely, ESGV may be preferred for its lower expense ratio and large asset base. The choice often depends on individual priorities such as cost minimisation, desire for more performance history, or alignment with a particular fund provider's ESG methodology.

ESGU vs ESGV

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare iShares ESG Aware MSCI USA ETF (ESGU) and Vanguard ESG U.S. Stock ETF (ESGV). This page outlines their expense ratios of 0.15% and 0.09% respectively, alongside dividend yields, net assets, inception dates, and shared top holdings such as NVDA, AAPL, and MSFT. We examine how each fund tracks its respective market index to help you understand these similar but distinct ETFs. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

ESGU

Metric

ESGV

0.15%

Expense Ratio

0.09%

0.92%

Dividend Yield

0.86%

$17.96B

Net Assets

$13.65B

273

Holdings

1,236

Dec 1, 2016

Inception Date

Sep 18, 2018

–

Index Tracked

–

Large Blend

Fund Category

Large Blend

ESGV costs about $6.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	ESGU	ESGV
NVDANVIDIA Corporation	7.79%	8.60%
AAPLApple Inc.	7.39%	7.65%
MSFTMicrosoft Corporation	5.35%	6.29%
AMZNAmazon.com, Inc.	3.65%	4.21%
GOOGAlphabet Inc.	3.54%	2.66%
AVGOBroadcom Inc.	2.48%	2.88%
METAMeta Platforms, Inc.	2.05%	2.10%
GOOGLAlphabet Inc.	1.96%	3.30%
MUMicron Technology, Inc.	1.70%	1.80%
TSLATesla, Inc.	1.56%	1.80%

Investment Analysis

ESGU

Pros

Large asset base supports trading liquidity and institutional confidence.
Excludes several controversial sectors to align with ESG criteria.
Longer operating history provides a substantial performance record.

Considerations

Higher expense ratio compared to similar Vanguard ESG funds.
Lower dividend yield may reduce appeal for income-focused investors.
Significant concentration in top holdings raises single-stock risk.

ESGV

Pros

Very low expense ratio enhances long-term net returns.
Reputable issuer with a strong track record for fund management.
Large asset base contributes to efficient index tracking.

Considerations

Slightly shorter operating history limits long-term performance analysis.
Lower dividend yield reduces attractiveness for income investors.
High concentration in top holdings mirrors market-cap weighting risks.

About ESGU and ESGV

ESGU (ESGU)

The iShares ESG Aware MSCI USA ETF offers investors exposure to a portfolio of large and mid-cap U.S. stocks selected for their Environmental, Social, and Governance (ESG) profiles. Rather than excluding companies entirely, this fund aims to reflect the characteristics of the broader U.S. equity market while tilting towards firms with stronger ESG metrics. With a low expense ratio of 0.15%, it seeks to be a cost-efficient option for those interested in sustainable investing themes. The fund currently holds 273 stocks, providing diversification across major American industries. While it has a dividend yield of approximately 0.92%, income is not the primary focus. Investors should remember that ESG scores are based on third-party data and methodologies, which can vary. As with all equity funds, capital values can rise and fall, and past performance does not guarantee future results. This ETF is designed for those looking to align their investments with sustainability criteria without abandoning exposure to the U.S. market's leading companies.

ESGV (ESGV)

The Vanguard ESG U.S. Stock ETF (ESGV) offers investors exposure to a diversified portfolio of U.S. large, mid, and small-cap companies that meet specific environmental, social, and governance (ESG) screening criteria. By focusing on firms with strong ESG practices, the fund aims to align investment strategies with values while maintaining broad market coverage. With an expense ratio of just 0.09%, it is designed to be a cost-effective option for those seeking sustainable investing. The fund holds approximately 1,236 stocks, providing a wide spread across various sectors. Investors should note that ESG-focused funds may exclude certain industries or companies, potentially affecting performance compared to traditional broad-market indices. As with all investments, values can rise and fall, and returns are not guaranteed. This fund suits those interested in integrating ESG considerations into their equity holdings.

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ESGU vs ESGV

Fund Snapshot

Investment Analysis

ESGU

Pros

Considerations

ESGV

Pros

Considerations

About ESGU and ESGV

Buy ESGU or ESGV in Nemo

Zero Commission

Trusted & Regulated

6% Interest on Cash

Frequently asked questions

What does 'ESG' stand for, and how do these funds apply it?

How do expense ratios affect long-term investment returns?

What is index tracking in the context of exchange-traded funds?

How do the expense ratios of ESGU and ESGV compare?

What are the main holdings shared by ESGU and ESGV?

What are the dividend yields for ESGU and ESGV?

How do the inception dates and net assets of these funds differ?

Are these funds suitable for income-focused investors?

What sector exposure do these funds provide?

How can beginners interpret the differences in these two similar funds?

What should investors know about liquidity in these funds?

Why might an investor choose one fund over the other?

Fund Snapshot

About ESGU and ESGV