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The Top-Rated Sustainable ETFs in 2024

Xtrackers MSCI World IT and Fidelity US Quality Income are among the sustainable ETFs with the strongest returns so far this year.

Sunniva Kolostyak 12 November, 2024 | 9:20AM
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Choosing a sustainable ETF for your portfolio, but unsure of where to start? These considerations might put you on the right path.

A sustainable investment could look like many things, as we’ve seen in our recent article on the top-rated sustainable funds in 2024. A sustainable tag could mean completely different things for different ETFs, and the jargon often leave investors confused about whether a fund has exclusions, inclusions, or any goal at all.

A consistency in strategy is therefore essential when making a selection. In this article, we are highlighting 10 ETFs with the highest sustainability rating, a Gold Morningstar Medalist Rating, and, of course, the best returns this year.

In total, 12 different ETFs have a Morningstar Sustainability Rating of High and a Morningstar Medalist Rating of Gold available to investors in the UK. Across these funds, there are a total of 72 share classes to choose from. Below, we highlight the 10 ETFs across sterling, euro, Swiss franc and dollar share classes.

These sustainable funds are top-rated by Morningstar:

  1. Xtrackers MSCI World Information Technology UCITS ETF XDWT
  2. SPDR® MSCI World Technology UCITS ETF SPFT
  3. iShares MSCI World Information Technology Sector ESG UCITS ETF WITS
  4. Fidelity US Quality Income ETF FUSC
  5. HSBC NASDAQ Global Semiconductor UCITS ETF HNSCFP
  6. iShares MSCI USA Value Factor ESG UCITS ETF IUVE
  7. iShares MSCI Europe Quality Dividend ESG UCITS ETF QDVX
  8. iShares MSCI EMU Paris-Aligned Climate UCITS ETF EMPA
  9. iShares Euro Total Market Growth Large UCITS ETF IDJG
  10. iShares V PLC - iShares MSCI World Health Care Sector ESG UCITS ETF WHCS

10 Gold-Rated ETFs Scoring Highly on Sustainability

Xtrackers MSCI World Information Technology UCITS ETF XDWT


The CHF 3.9 billion Xtrackers MSCI World Information Technology rose 1.14% over the past month. The fund beat its benchmark, the Morningstar Global Technology Target Market Exposure Index, by 2.25 percentage points. Year to date, the Xtrackers fund rose 28.59%. The fund has climbed 9.78% over the past three years and gained 18.92% over the past five years.

SPDR® MSCI World Technology UCITS ETF SPFT


The EUR 677 million SPDR MSCI World Technology rose 1.46% over the past month. The fund beat its benchmark, the Morningstar Global Technology Target Market Exposure Index, by 2.57 percentage points. Year to date, the State Street fund rose 27.47%. The fund has climbed 14.24% over the past three years and gained 22.7% over the past five years.

iShares MSCI World Information Technology Sector ESG UCITS ETF WITS


The EUR 865 million iShares MSCI World Information Technology Sector ESG rose 1.24% over the past month. The fund beat its benchmark, the Morningstar Global Technology Target Market Exposure Index, by 2.35 percentage points. Year to date, the iShares fund rose 23.66%. The fund has climbed 13.74% over the past three years and gained 22.46% over the past five years.

Fidelity US Quality Income ETF FUSC


The CHF 1.33 billion Fidelity US Quality Income rose 0.89% over the past month. Year to date, the Fidelity ETF rose 20.49%. The fund has climbed 7.18% over the past three years, while its benchmark, the Morningstar US High Div Yield, has an average tree-year return of 5.79%. The fund has gained 10.15% over the past five years.

HSBC NASDAQ Global Semiconductor UCITS ETF HNSCFP


The EUR 95 million HSBC NASDAQ Global Semiconductor fell 1.47% over the past month. The fund fell further than its benchmark, the Morningstar Global Technology Target Market Exposure Index, by 0.36 percentage points. Year to date, the HSBC fund rose 19.24%. The fund was launched in Jan. 2022.

iShares MSCI USA Value Factor ESG UCITS ETF IUVE


Over the past month, the passively managed iShares MSCI USA Value Factor ESG fell 2.44%, while the average US large-cap value equity fund lost 0.81%. The fund placed in the 100th percentile for performance and fell further than its benchmark, the Morningstar US Large-Mid Cap Broad Value Index, by 1.19 percentage points. The $315 million fund has however climbed 11.07% year to date, but underperformed the average fund in its category, which rose 13.36%. The iShares fund, which launched in June 2021, has gained 5.67% over the past three years.

iShares MSCI Europe Quality Dividend ESG UCITS ETF QDVX


The EUR 713 million iShares MSCI Europe Quality Dividend ESG fell 4.11% over the past month. The loss on the passively managed fund was worse than the 2.72% loss on the average fund in the Europe equity income category, leaving it in the 100th percentile for performance. The fund fell further than its benchmark, the Morningstar Developed Europe Dividend Yield >2.5% Index, by 1.83 percentage points. Year to date, the iShares fund rose 10.54%, while the average fund in its category rose 7.92%. The fund has climbed 10.71% over the past three years and gained 7.71% over the past five years.

iShares MSCI EMU Paris-Aligned Climate UCITS ETF EMPA


The passively managed iShares MSCI EMU Paris-Aligned Climate lost 3.8% over the past month, falling further than the average fund in the Eurozone large-cap equity category, which fell 3.56%. The fund placed in the 73rd percentile for performance and fell further than its benchmark, the Morningstar Developed Markets Eurozone Target Market Exposure Index, by 0.38 percentage points. The EUR 1.1 billion fund has gained 8.65% year to date, while the average fund in its category is up 6.39%. The iShares fund, which launched in July 2021, has gained 3.27% over the past three years.

iShares Euro Total Market Growth Large UCITS ETF IDJG


The EUR 372 million iShares Euro Total Market Growth Large fell 4.85% over the past month. The loss on the passively managed fund was worse than the 3.56% loss on the average fund in the Eurozone large-cap equity category, leaving it in the 85th percentile for performance. The fund fell further than its benchmark, the Morningstar Developed Markets Eurozone Target Market Exposure Index, by 1.43 percentage points. Year to date, the iShares fund rose 6.58%, while the average fund in its category rose 6.39%. The fund has climbed 2.94% over the past three years and gained 8.44% over the past five years.

iShares V PLC - iShares MSCI World Health Care Sector ESG UCITS ETF WHCS


The EUR 735 million iShares MSCI World Health Care Sector ESG fell 2.99% over the past month. The fund edged out its benchmark, the Morningstar Global Healthcare Target Market Exposure Index, by 1.95 percentage points. Year to date, the iShares fund rose 3.23%. The fund has climbed 3.93% over the past three years and gained 8.99% over the past five years.

Methodology

This is how we made our selection. All these ETFs are available for sale across Europe, but some regions may vary. The Morningstar Sustainability Rating indicates the ESG risk level relative to its peers. To achieve a High rating, the fund needs to be in the top 10%. All these ETFs fit that brief. We have also added a filter to only include ETFs where at least one share class has a Gold Morningstar Medalist Rating, and it must be quoted in sterling, euros, Swiss franc, or dollars.

This article was generated with the help of automation and reviewed by Morningstar editors.


The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Sunniva Kolostyak

Sunniva Kolostyak  is senior data journalist for Morningstar.co.uk

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