Top asset managers Vanguard Group Inc. and BlackRock Inc. on Sept. 24 introduced new exchange-traded funds that exclude oil companies, coal producers and other industries that a growing number of investors want to avoid.
The so-called ESG funds use environmental, social or governance criteria to pick investments.
"In our conversations clients continuously bring up the topic," said Rich Powers, head of ETF product management for Vanguard, the largest mutual fund company with $6.6 trillion under management.
Researcher Morningstar Inc. found flows into such funds reached a record pace this year, taking in $20.9 billion through June, just shy of the annual record of $21.4 billion for all of 2019.
The demand partly reflects the performance of the funds, which has often topped traditional investment products this year. That was despite many funds being held back by strategies such as not owning high-performing energy stocks, as second-quarter results showed.
The Vanguard ESG U.S. Corporate Bond ETF, the company's first fixed income offering in the sector, will track the Bloomberg Barclays MSCI U.S. Corporate Select Index, which excludes oil and gas, alcohol and civilian firearms companies.
Previously the manager launched ESG equity products including the Vanguard ESG U.S. Stock ETF, now with about $2 billion in assets.
BlackRock, with $7 trillion in total assets, will offer three ESG stock funds that recreate exposure to S&P indexes of large, mid-cap and small-cap companies.
The ETFs will screen out companies with certain levels of investment in the thermal coal, oil sands or shale energy sectors, BlackRock said.
Recommended Reading
E&Ps Posting Big Dean Wells at Midland’s Martin-Howard Border
2025-04-11 - Diamondback Energy, SM Energy and Occidental Petroleum are adding Dean laterals to multi-well developments south of the Dean play’s hotspot in southern Dawson County, according to Texas Railroad Commission data.
On The Market This Week (April 7, 2025)
2025-04-11 - Here is a roundup of marketed oil and gas leaseholds in the Permian, Uinta, Haynesville and Niobrara from select E&Ps for the week of April 7, 2025.
US Oil Rig Count Falls by Most in a Week Since June 2023
2025-04-11 - The oil and gas rig count fell by seven to 583 in the week to April 11. Baker Hughes said this week's decline puts the total rig count down 34 rigs, or 6% below this time last year.
IOG, Elevation Resources to Jointly Develop Permian Wells
2025-04-10 - IOG Resources and Elevation Resources’ partnership will focus on drilling 10 horizontal Barnett wells in the Permian’s Andrews County, Texas.
Saudi Aramco Discovers 14 Minor Oil, Gas Reservoirs
2025-04-10 - Saudi Aramco’s discoveries in the eastern region and Empty Quarter totaled about 8,200 bbl/d.