Many of you have requested a breakdown of funds that align with environmental, social, and governance standards. We spend most of our time analyzing covered calls, closed-end funds, and maximizing high yield. That makes sense because our main goal is generating cash flow.
However, investing responsibly does not mean you have to surrender your dividend income. You can build a portfolio that reflects your values and still pays you. Today, we are looking at three ESG funds that provide sustainable exposure while still yielding a reliable return.
HOWEVER, you must understand that funds with specific ESG requirements will generally underperform the S&P 500 and other technology indices.
Interestingly, I was able to find 3 funds that outperformed the S&P 500 SPY 0.00%↑ on a YTD basis. While I don’t expect this outperformance to continue, it’s nice to know that they can offer attractive returns over time while still paying a dividend.
These funds all pay a dividend and provide direct exposure to some of the strongest blue chip companies in the world. So although you may be giving up exposure to technology companies, you are still fitting within the theme of collecting income from your invested capital.
Before we jump into the data, if you are just getting your portfolio off the ground, make sure to read my recent guide on Start Investing With $1,000 or review Dividend Investing for Beginners to get your snowball rolling.
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