A strong management team and sound investment process underpin SPDR MSCI USA Climate Paris Aligned ETF's Morningstar Medalist Rating of Silver. The portfolio maintains a cost advantage over competitors, priced within the least expensive fee quintile among peers.  

 The strategy’s management team earns an Above Average People Pillar rating. The strategy's investment approach stands out and earns an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained an underweight position in quality exposure and has an overweight in yield exposure compared with category peers. Low quality exposure is attributed to stocks with higher financial leverage and lower profitability. And a high yield exposure is rooted in holding high dividend-paying or buyback stocks. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

Microsoft

Apple

NVIDIA

Amazon

Alphabet

Eli Lilly

Visa

Digital Realty Trust

Broadcom

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. SPDR MSCI USA Climate Paris Aligned ETF earns an Above Average Process Pillar rating. The main driver of the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. 

The investment strategy as stated in the fund's prospectus is:  The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the MSCI USA Climate Paris Aligned Index.  The fund generally invests substantially all, but at least 80%, and of its total assets in the securities comprising the index. The index is designed to exceed the minimum standards for a “Paris-Aligned Benchmark” under the EU BMR. 

 The portfolio is overweight in real estate and financial services relative to the category average by 6.1 and 4.2 percentage points, respectively. The sectors with low exposure compared to category peers are technology and communication services, underweight the average by 4.3 and 3.8 percentage points of assets, respectively. The portfolio is composed of 266 holdings and is diversified among those holdings. In its most recent portfolio, 36.6% of the portfolio's assets were concentrated in the top 10 fund holdings, as opposed to the category average's 54.8%. And in closing, in terms of portfolio turnover, on a year-over-year basis, 14% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

Above Average

Process

SPDR MSCI USA Climate Paris Aligned ETF's strong team drives the strategy's Above Average People Pillar rating. There are three managers listed on the fund: Karl Schneider, Emiliano Rabinovich, Lisa Hobart. The team is well equipped, with an average of 18 years of portfolio management experience. Though they do not manage other products together, managers may manage them individually.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

People

State Street Global Advisors is under new leadership but continues to move along the positive trajectory established by former leaders. SSGA maintains its Above Average Parent Pillar rating.
Cyrus Taraporevala, who oversaw much of SSGA’s recent transformation, retired from the CEO position in December 2022 and passed the baton to his successor, Yie-Hsin Hung. She inherited a business that’s become more disciplined with its fund lineup. Fees have come down, while product development remains focused on fixed-income and sustainability funds, and many of SSGA’s launches have echoed that intention.
The seeds that SSGA planted over the past several years have been bearing fruit. It built out a low-cost series of portfolio building-block ETFs in the U.S. bearing the “SPDR Portfolio” branding. SSGA launched these later than its industry rivals, so they aren’t as large. But they’re competitive, with solid management and low fees, which helped them consistently take in new money over the past several years.
SSGA continued to overhaul its ETF business in Europe with most of its recent fixed-income and sustainability fund launches. Many of these funds track indexes and charge relatively low fees. With operations in the U.S. and Europe standing on a firm foundation, SSGA will put more focus on its Asia-Pacific business—the smallest regional segment of its business.

Parent

SPDR MSCI USA Climate Paris Aligned ETF

NZUS tracks a tier-weighted index of large- and mid-cap US stocks selected and weighted based on ESG criteria that are compatible with the Paris Climate Agreement and carbon reduction goals.

SPDR MSCI ACWI Climate Paris A

It's reasonable to expect that in 2023, climate-driven and sustainability-focused investment strategies, including exchange traded funds, will receive plenty of attention.

Flexibility, Versatility Essential in Climate Change Investing

SPDR S&P 500 ESG ETF

SPDR S&P SmallCap 600 ESG ETF

Spdr Bloomberg SASB Developed Markets EX US ESG Select

SPDR Bloomberg SASB Emerging Markets ESG Select ETF

SPDR SSGA Gender Diversity Index ETF

Environmental, social, and governance (ESG) investing is under increasing scrutiny this year as regulators clamp down on greenwashing and as some politicians target the investing style, asserting that the asset managers behind it are politically motivated. Even with those controversies, a majority of financial professionals back this methodology and see long-term relevance.

Financial Pros Still Back ESG

In what's likely the result of an increasingly partisan divide in Washington, D.C., environmental, social, and governance (ESG) investing is more frequently viewed through a political lens.

Broad Support Among State AGs for Evaluating ESG

Despite myriad challenges this year, namely the deterioration of growth stock performance, investors remain enthusiastic about climate and green energy exchange traded funds. Data confirm as much, and plenty of related ETFs have come to market this year, including the SPDR MSCI USA Climate Paris Aligned ETF (NZUS).

Despite Headwinds, Green Funds Stand Firm

Owing to the increasing popularity of exchange traded funds such as the SPDR Bloomberg SASB Corporate Bond ESG Select ETF (RBND) and the SPDR MSCI USA Gender Diversity ETF (SHE), among others, demand is soaring for ESG indexes. Data confirm the rapid growth of this burgeoning index segment.

ESG Indexes Are Big, Growing Business

The performance of environmental, social, and governance (ESG) strategies, including exchange traded funds, is leaving something to be desired this year, but a new survey suggests high-level investors are seeing the forest through the trees and remain dedicated to ESG.

Demand for ESG Investments Remains Strong, According to Survey

Global asset allocators are becoming selective with their environmental, social, and governance (ESG) priorities, and that's a good thing for the related exchange traded funds. In recent years, more nuanced funds, including those focusing on climate and sustainability, entered the ESG space, further cementing the notion that sustainable investing (SI) continues gaining mainstream momentum.

Climate, Sustainability Among Top ESG Priorities

SPDR Nuveen Municipal Bond ESG ETF

SPDR S&P 500 Fossil Fuel Reserves Free ETF

Investors should take a look at exchange traded fund strategies to help capitalize on the potential benefits of environmental, social, and governance investing in the current market.

ETF Strategies to Access the Growing ESG Opportunities

With pressing issues in the ESG space, investors must separate fact from fiction.

Beyond the Backlash: Why ESG Matters More Than Ever

In the wake of the Inflation Reduction Act being signed into law, some investors are renewing their enthusiasm for renewable energy equities and the related exchange traded funds. In many cases, that means market participants are leaning into ETFs focusing on specific renewable energy and clean technology concepts.

Positive Inflation Reduction Act Implications for This ETF

As has been widely documented, environmental, social, and governance (ESG) exchange traded funds and those focusing on sustainability struggled in the first half of 2022 owing in large part to a rough environment for growth stocks.

Sustainable ETF Investors Take Long View

The Paris Climate Accord isn't just an agreement between nations to fight climate change and reduce carbon emissions. It touched a new subset of sustainable investing — one that issuers of exchange traded funds eagerly provided access to.

NZUS: Efficient Avenue to Paris-Aligned Investing

These days, the investment landscape is awash in green talk, some of it credible, some of it not so much. And while there's plenty of chatter about greenwashing — rightfully so — there are other emerging green opportunities for investors.

Green Contracts Could Mean Green for This ETF

Xtrackers S&P 500 ESG ETF

iShares PHLX Semiconductor ETF

SPDR S&P 500 ETF Trust

Energy Select Sector SPDR Fund

Strive Asset Management was the most noticeable newcomer to file for ETFs, while Putnam and T. Rowe Price plan to add to their relatively new lineups.

Newcomers & Industry Stalwarts Among Recent ETF Filers

There's no shortage of corporations and governments with ambitious carbon reduction or net-zero plans. A major element in reaching those goals is electrification, or how electric power is generated.

Electrification Opportunity Resides in NZUS

From a broad perspective, low-carbon investing remains attractive. That's even more true today as growth stocks — the area in which many low-carbon equities dwell — are retreating this year.

News for SPDR MSCI USA Climate Paris Aligned ETF ETF (NZUS)