How To Invest Responsibly With The 'Do The Right Thing' ETF

Unfortunately, the corporate world is filled with companies that will do whatever it takes to boost profits at the expense of the environment, the world and social progress. Self-serving and irresponsible companies may provide investors with solid returns over time. However, if you are looking for both a solid diversified investment and a way to support companies that are doing the right thing and helping to move the world in the right direction, Stash may have the perfect investment for you.

Feel-Good Investment

Meet the “Do the Right Thing” ETF, more commonly known as the iShares MSCI USA ESG Select ETF KLD. With that nickname, the ETF includes shares of more than 100 stocks that have been screened for positive environmental, social and governance (ESG) initiatives. 

MSCI has assigned an ESG score to top global companies and included the top-scoring companies in its “Do The Right Thing” ETF.

High-Scoring Companies

The “Do the Right Thing” fund is not just about sustainable energy companies. Any company can run its business in an environmentally and socially responsible way. For example, the fund’s biggest holding is diversified technology company 3M Co MMM. 3M has donated more than $1.4 billion to educational, community and environmental causes around the globe.

Another top holding in the fund is Ecolab Inc. ECL, a company that provides water, hygiene and energy technologies around the world. Outside of its normal business operations, Ecolab has built quite a reputation as a conscientious member of the global business community.

The company’s social responsibility programs, including “Solutions for Life,” which targets water conservation and hygiene, along with its nearly $81 million in donations to educational, cultural, environmental and community development programs lands it a top spot in the “Do the Right Thing” fund.

Returns

There’s no question that investors can feel good about the companies included in the “Do the Right Thing” fund, but is it a smart investment to make as well? In the last three years alone, the fund has returned almost 14 percent, according to Morningstar. In addition, the fund’s expense ratio, the amount of money spent on fees and administrative costs, is only 0.5 percent percent.

Takeaway

The “Do the Right Thing” fund is only one of the market's many “I believe” investment that allow investors to avoid hundreds of dollars in trading fees and invest in hundreds of stocks they believe in all at once by buying a single ETF.

Disclosure: the author holds no position in the stocks mentioned.