ESGU Trailed IVV by $26,370 on $300,000 Over Five Years. Its ESG Tilts Are Part of the Reason Ryne Mauck Tue, November 10, 2026 at 9:03 PM EST 4 min read IVV +0.26% AAPL -0.88% ESGU -0.30% MSFT -1.78% NVDA -3.27% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
ESGU gained 59% over five years but lagged IVV's 68%, though both funds come from the same issuer and hold the same mega-caps.
ESGU charges 0.15% versus IVV's 0.03%, a $360 yearly gap on $300,000 that can compound into tens of thousands over decades.
ESG biases can help in some periods and hurt in others, so buyers expecting market returns with an ESG filter risk underestimating the drift.
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Over the five years ending November 6, 2026, a hypothetical $300,000 investment in the iShares ESG Aware MSCI USA ETF (NASDAQ:ESGU) finished $26,370 behind the same amount in the iShares Core S&P 500 ETF (NYSEARCA:IVV), according to 24/7 Wall St. measurements.
Each fund posted gains. Between November 8, 2021, and November 6, 2026, ESGU returned 59.4% with distributions included, while IVV returned 68.19%. Both come from the same issuer and hold the same mega-caps at the top, yet the returns sit 8.79 percentage points apart.
Start with the fee. ESGU charges an expense ratio of 0.15%, per its June 30, 2026 fact sheet. IVV charges 0.03%. On every $10,000, that works out to $15 a year versus $3. On the hypothetical $300,000 investment, that comes out to $450 versus $90 (a difference of $360 a year in fees alone).
Small fees compound. Assume both funds earn an identical 7% a year before fees, a rate picked only for illustration. After fees, the IVV account would finish roughly $6,569 ahead after 10 years and roughly $25,626 ahead after 20, from the fee gap alone. The five-year shortfall came from more than fees, though.
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ESGU tracks the MSCI USA Extended ESG Focus Index. iShares says the fund targets large- and mid-cap U.S. companies with positive environmental, social, and governance (ESG) characteristics while seeking risk and return similar to the MSCI USA Index. The index starts from a broad U.S. stock universe, and shifts weight toward firms with stronger ESG ratings. IVV tracks the S&P 500.
The biases work around the edges. At mid-year, ESGU's largest positions were NVIDIA (NASDAQ:NVDA) at 7.14%, Apple (NASDAQ:AAPL) at 6.46% and Microsoft (NASDAQ:MSFT) at 4.08%. Its top 10 holdings made up 35.08% of a 277-stock portfolio, and information technology claimed 38.08%. Those mega-caps also top most broad U.S. indexes. A holder pays 0.15% for a core that looks a lot like the plain market, plus biases that can pull returns away from it.
ESG biases can help in some periods and hurt in others. This window landed on the losing side, and the result can reverse. Over the year ending November 6, 2026, the funds ran closer together: ESGU's adjusted price rose 10.47% versus 10.97% for IVV. ESGU also details its methodology in its fund documents, and Morningstar awarded it a Gold medal effective April 27, 2026. The real risk lies with holders who expected market returns with an ESG filter and underestimated how far the biases can move results.
Put the ESG fund's index and expense ratio side by side with a plain index fund's. Ask where its starting universe differs, what the screens remove, and how far its returns have drifted from the broad market in both directions. Then decide whether your ESG preference is worth a 0.12-point fee premium and tracking differences that could cost, or earn, thousands on a retirement-sized balance.
One investment mistake could create big risks for your retirement. Many investors make the same critical errors: being too conservative, making big bets on "sure things," or paying excessive fees. Any of those blunders can endanger your hard-earned savings.
Now you can learn the mistakes even experienced investors make (and ways you can sidestep them before it's too late) with this new guide: 13 Retirement Mistakes and How to Avoid Them from Fisher Investments. (sponsor)
Contact editorial@247wallst.com for any questions or corrections.
