It’s hard to keep track of all the policy changes in Washington, D.C., these days, but a prominent shift in 2025 has been a change in approach to social responsibility programs. Immediately after taking office, President Donald Trump pulled out of the Paris climate agreement and declared an “energy emergency” to expedite fossil fuel drilling. He also quickly signed an executive order targeting private companies with diversity, equity and inclusion (DEI) programs.
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Polls are fuzzy around what most Americans think about social responsibility, in large part because it depends on how the question is asked. But when you leave out the divisive label of DEI and instead focus on tolerance and diversity, most pollsters find a clear majority of Americans condemn discrimination and find value in other cultures, genders and ethnic groups. And while there are predictable partisan divides, Gallup found more than 6 in 10 Americans are concerned about climate change, with roughly half believing it will pose a “serious threat” in their lifetime.
Those figures demonstrate that there are still a great many investors who care about diversity or climate change. But given the current environment, it is increasingly important to think beyond the standard index funds if you are personally aligned with these values. The following list of socially responsible funds help investors “vote with their wallet” to back companies that align with their social values:
| Fund | Assets under management | Expense ratio |
| iShares ESG Aware MSCI USA ETF (ticker: ESGU) | $14.1 billion | 0.15% |
| Vanguard FTSE Social Index Fund (VFTAX) | $11.4 billion | 0.13% |
| iShares ESG Aware MSCI Emerging Market ETF (ESGE) | $4.5 billion | 0.26% |
| iShares ESG Aware MSCI EAFE ETF (ESGD) | $8.7 billion | 0.21% |
| iShares Global Clean Energy ETF (ICLN) | $1.3 billion | 0.41% |
| Invesco Solar ETF (TAN) | $800 million | 0.67% |
| CCM Community Impact Bond Fund (CRATX) | $3.7 billion | 0.77% |
iShares ESG Aware MSCI USA ETF (ESGU)
Assets under management (AUM):
$14.1 billion Expense ratio: 0.15%, or $15 annually on $10,000 invested
This iShares fund is a leader in assets among socially responsible funds, and therefore the obvious place to start for investors looking to invest with an eye towards social impact. It’s also an index fund that is quite affordable from an annual fee perspective, so it doesn’t cost much more than the typical large-cap ETF. The iShares ESG Aware ETF holds large U.S. stocks that get favorable environmental, social and governance ratings, including tech titans like Microsoft Corp. (MSFT) and Nvidia Corp. (NVDA), among others. The ESGU fund doesn’t pick companies that are exclusive to clean energy or other virtuous sectors, but rather includes about 280 leading U.S. companies that are operating in a way that aligns with ESG goals.
Vanguard FTSE Social Index Fund (VFTAX)
AUM: $11.4 billion Expense ratio: 0.13%
Another large fund that’s also a hair cheaper than ESGU based on annual expenses is VFTAX, which is a mutual fund instead of an exchange-traded fund — and that may create friction for some investors. Most notably, there’s a $3,000 minimum to invest in this social index fund, so if you have a smaller nest egg this may not be an accessible option. The fund is diversified across about 430 total positions that are similar to the S&P 500 and the prior index fund, with Apple Inc. (AAPL), Nvidia and Microsoft leading the portfolio. Vanguard is well established with a reputation for offering low-cost index funds for long-term investors, so if you can get over the $3,000 minimum, it’s worth considering this large-cap fund that aligns with ESG values.
iShares ESG Aware MSCI Emerging Market ETF (ESGE)
AUM: $4.5 billion Expense ratio: 0.26%
Admittedly, the leading components of the largest socially responsible funds aren’t all that different from what you’d find in standard large-cap funds. Where an ESG-oriented approach may result in different holdings, however, is when a socially responsible investing methodology is used in emerging markets. Sometimes, companies in developing markets can act far differently than domestic blue chips — and for investors looking to tap into growth overseas but interested in avoiding the worst corporate actors, ESGE is a socially responsible fund to consider. The ETF holds about 300 total stocks, led by 28% in China followed by 21% in Taiwan and 17% in India. Some recognizable components include Asian e-commerce and technology king Alibaba Group Holding Inc. (BABA) and leading chipmaker Taiwan Semiconductor Manufacturing Co. Ltd. (TSM).
iShares ESG Aware MSCI EAFE ETF (ESGD)
AUM:
$8.7 billion Expense ratio: 0.21%
Taking a similar approach to the prior emerging-markets fund, ESGD offers exposure to overseas investments but with a focus on developed markets in the EAFE region — that is, Europe, Australasia and the Far East. ESGD is a good way to add geographic diversification without the risk of emerging markets. There are roughly 380 total holdings, with Japan being the largest country in the portfolio with 22% of assets, followed by the U.K. with 15%, then France with 11%. Companies in this socially responsible fund are multinationals that may be familiar, too, including German software leader SAP SE (SAP), Dutch chipmaker ASML Holding NV (ASML) and Danish health care leader Novo Nordisk (NVO).
iShares Global Clean Energy ETF (ICLN)
AUM: $1.3 billion Expense ratio: 0.41%
Getting away from broad funds and into discrete areas of socially responsible investing, this clean energy fund provides exposure to companies leading decarbonization efforts and fighting climate change. It has a long history, formed back in 2008, and holds about 100 top companies including First Solar Inc. (FSLR) and Scottish utility SSE PLC (OTC: SSEZY), among others. U.S. companies make up the largest geographic segment at the portfolio, but only at 24%. Nations like China (13%), Brazil (12%) and Denmark (9%) also play key roles in this fund’s global approach to the clean energy industry.
Invesco Solar ETF (TAN)
AUM: $800 million Expense ratio: 0.67% A hyper-targeted option, this Invesco ETF is focused on about 40 solar-related companies that are leaders in this dynamic industry. Right now, that includes domestic firms like Enphase Energy Inc. (ENPH) and First Solar along with Chinese companies such as Xinyi Solar Holdings Ltd (OTC: XISHY). U.S. solar stocks make up more than half of the portfolio, which makes for a unique mix of companies that could provide solid exposure to key markets around the world. Just keep in mind that as an industry-specific fund, it can be much more volatile than the diversified ESG options listed previously — and given the talk around trade wars with China, the geographic mix is also worth watching.
CCM Community Impact Bond Fund (CRATX)
AUM: $3.7 billion Expense ratio: 0.77%
Though larger than some of the prior funds, CRATX has been left for last because it’s not an equity-focused fund. As the name implies, it is instead focused on bond markets — and therefore is an income-generating asset more than a growth-oriented stock fund. That said, CRATX is a good option for low-risk investors looking for income, boasting a yield just north of 3% by focusing on high-rated bonds. Most importantly for socially conscious investors, it does so by investing in “well-researched bonds that have direct and measurable positive societal impacts.” If you aren’t turned off by the investment minimum of $2,500, this is a good way to access the corporate bond market without sacrificing ESG priorities.
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7 Best Socially Responsible Funds originally appeared on usnews.com
Update 02/12/25: This story was published at an earlier date and has been updated with new information.
