Solar-Powered Vehicles Shine Light on Interest in ESG

Speaking to the media outlet, Dr. Bonna Newman, a senior researcher in photovoltaics (aka solar panels), says that “the performance of photovoltaics and solar modules has improved dramatically in the last few years,” with solar panels seeing a 40% increase in performance and roughly 70% reduction in cost over the last decade.

This massive reduction in cost and increase in efficiency is leading to several startups like Aptera, Lightyear, and Sono embarking upon plans to release solar-assisted commercial EVs over the next few years.

Meanwhile, over in the investment world, ETFs focused on environmental, social, and corporate governance principles are seeing record inflows year-over-year. ETF research and consultancy firm ETFGI reported in November that ESG ETFs and ETPs saw global net inflows of $130 billion year-to-date as of October 31, which was 49% higher than the record full year 2020 net inflows.

All of which is to say that environmental issues are continuing to gain traction, and ESG investing isn’t going anywhere.

For investors looking to increase their exposure to ESG, American Century Investments offers a suite of actively managed, semi-transparent ESG EFS: the American Century Sustainable Equity ETF (ESGA), the American Century Sustainable Growth ETF (ESGY), and the American Century Mid Cap Growth Impact ETF (MID). Launched in July 2020, the three funds screen for ESG within their securities.

ESGA and ESGY invest in large-cap companies with large growth and value potential that also rank highly on ESG metrics.

Both funds use ACI’s proprietary model that assigns a score to each security for financial metrics and a separate score for ESG metrics, then combines them for an overall score. The highest-scoring securities are selected within each sector, creating a portfolio with strong performance and higher ESG ratings than the stocks in the S&P 500 Index (for ESGA) and the Russell 1000 Growth Index (for ESGY).

MID, meanwhile, invests in companies that are actively working across a broad spectrum of ESG principles, including clean energy and solar. MID seeks to invest in mid-cap companies that exhibit growth through an ESG lens. The fund uses the market caps from the Russell Mid-Cap Growth Index, which are companies between $677 million to $46 billion. MID is a non-diversified fund.

While ESGA and ESGY both use ACI’s scoring system, MID seeks to offer measurable global impact through ESG integration and alignment with UN Sustainable Development Goals. It’s a high-conviction portfolio that employs a top-down thematic approach that highlights opportunities driving positive social change combined with bottom-up fundamental analysis.

Both ESGA and ESGY have expense ratios of 0.39%. MID has an expense ratio of 0.45%.

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